I just recently took a job with a local cable contractor. We do disconnects in my area.
Initial costs for the job are pretty high and they include a $400, 28 foot extension ladder, some safety equipment, and tools.
The upkeep costs are likewise rather up there. I’m calculating (based on two days of work so far ) about $10 gas per day, as well as the cost of the little things such as labels, ink for the printing of maps, car insurance and maintenance (the job involves me driving most of the day from house to house).
So I was wondering, if I keep the receipts for all this stuff, can I expect some/all/none of this money to be refunded to me by mr taxman?
If this is stuff you bought with your personal money, which wasn’t reimbursed by your employer, whose primary purpose if for doing your job, then generally, yes, it’s tax deductable. To be sure, though, contact your friendly local tax attorney.
I’m not a tax pro, but I can tell you this for sure: Some of your expenses, under some conditions, are deductible. Some of the questions involved are:
Do you use that truck for business only? (the fuel)
Are you an employee of the cable contractor, or are you a contractor yourself?
There’s a tangled little clutch of rules about your office and its equipment, if you work from your home. If the office is physically separate from the rest of your house (lockable door between house and office, outside entrance to office,) and you don’t use that equipment for personal stuff, then you’re probably OK.
Consult the IRS. Consult a pro. Do it now, don’t wait until your books are hopelessly screwed up.
I guess it’s time to talk to a lawyer, for the fourth time this year
P.S: The truck is used MOSTLY for work (95% of the time). I mean I will probably take it when I go out once in a while, but that’s about it.
And the office is NOT in a seperate room, so I guess office supplies are out.
Finally, the safety equipment, ladder, and tools are not being reimbursed to me by my employer. I am an employee for the cable contractor, not a contractor myself.
It sounds like they’ve set you up as an independent sub-contractor, eg, you’re self-employed. As AskNott alluded to, the rules for home office deduction can be picky and a big red flag for audits. Be very careful there (don’t trust what the cable co told you; check with a pro). For the truck you can expense a set amount per mile, or the cost of the truck, depending on usage and other things. I’d recommend you schedule an initial review with an account who is familiar with people in your line of work. I’d also recommend that you get an accounting package like Quickbooks or Peachtree to keep tabs of your costs.
Also note that if you are self-employed these things are expenses, not deductions, which is better (the cost is removed from your pretax profits).
Also also: make sure that you are covered from an insurance standpoint for injury, liability, and possibly worker’s comp (may not be required). There are going to be a lot of little costs that you will incur. My suspicion is that the cable companies do this so that you bear a lot of the costs and risks, so make sure your @$$ is covered.
Office supplies can be deducted, but you need to keep them separate from supplies for personal use. For instance, you can deduct the cost of stamps, if you only use those stamps as part of your business. Personal letters are out.
It’s difficult to deduct expenses like heating your office when it’s part of your home. Audits are common. Best to keep you deductions to tangible items that can be kept separate.
Buying the equipment should be deductable.
If all else fails, remember this advice I once got from a tax professional: if you can justify and document an expense, deduct it. If it’s questioned, you have the proof to keep the deduction. If they decide to disallow it, you’re usually only out the amount of the deduction plus interest, since they aren’t going to hit someone with penalties if they’re making an honest effort and made a mistake.
) about $10 gas per day, as well as the cost of the little things such as labels, ink for the printing of maps, car insurance and maintenance (the job involves me driving most of the day from house to house).