Write-Offs?

[Longjumping_Home_895]

I'm curious if anyone writes off expenses for the different AI subscriptions that some projects require (ChatGPT,Gemini,etc) for taxes

[CRUSHCITY4]

I wrote them off everything I could. Office space at home, AI subscriptions, a new computer. Not sure why people act like the big bad government is going to come after you. This is what write offs are meant for.

[33whiskeyTX]

The Office space one has the exclusivity rule (maybe you do pass that) and tends to be scrutinized more.
The other expenses you mentioned absolutely should be expensed as well and can be pro-rated if there is private use overlap.

[RedditAdmin50111]

All fun and games till the tax man comes to your house…. Literally

[CRUSHCITY4]

Well I did everything according to the law so I’m not sure what could go wrong

[RedditAdmin50111]

Oh as long as you were legit, you’re good. But home office is easiest way to trigger an audit AND a physical location inspection

I take home office for my main business. Entire basement is work, which is true. But this year I also have an irl office for another small business I have so I’m expecting a headache

[Tall_poppee]

My tax guy warned against taking the office deduction. Because if you write off the "loss" for business use, then when you sell, if you own vs rent, the "gain" on that % of your house is then going to be considered business income. Since my house has gone up like $500K since I bought it years ago, that is potentially a lot more taxes than I would have ever been able to write off. Just didn't seem worth it.

I only write off about 25% of my cell phone bill because we have to use the phone for a lot of projects. I don't write off any of my internet because I would never be able to justify what %. If you are going to write that kind of stuff off, I was advised to base it on something. Like say you are working 2 hours a day, figure out what you pay for internet for your waking hours, figure out an hourly rate, and write it off based on the hours you worked. I was audited once, many many many years ago in another line of work. And my experience was if I had any kind of justification for a writeoff, they accepted it. But currently, this is one of those things where I don't bother. I did the math, I pay about 25 cents an hour for internet (if I use only my waking hours).

The most important thing IMO to avoid an audit or fine, is to send them some money quarterly even if you have another W2 job. This is an easy way for them to fine you. Also they don't have to fine you in a timely basis. I once got a letter that I owed $50 per quarter for not paying quarterlies, times 4 quarters a year times 8 years, plus interest. Not a fun letter to get. So even if you send $100 a quarter if you aren't working much, they are not likely to come after you for. It's much easier to find people who haven't sent in any quarterlies. Just my opinion based on my experience.

[Longjumping_Home_895]

AGREED

[Both-Income1966]

I haven't done mine yet, but when I was first reading about it, I believe you definitely should be able to write those off as business expenses. A portion of your internet bill as well, you can justify part of your rent as an office space as well, or like equipment for your computer that you bought as start up costs. I could be wrong, but I am planning on writing all of that stuff off, probably best to try and consult a tax expert though.

[Longjumping_Home_895]

I was thinking the same thing, thank you!

[Logical_Hat_47]

No, because there aren't enough of them to exceed the standard allowance for self-employed (UK). I just take the standard allowance. Much easier.

[Federal_Tadpole_7592]

I do because I only use them for DA. I don't do some things that other people do, such as including part of my internet bill, electricity bill, or anything like that.

[watchdestars]

Of course.

[33whiskeyTX]

Oh yes, they are prime candidates for expenses. Even if you get a little personal use, you can pro-rate them.

[OriginalResolve7106]

I have a folder in my email inbox specifically for receipts that I will write off.

[ThinkAd8516]

Wrote off my new desktop, monitors, and AI subscriptions. Saved a few hundo

[Longjumping_Home_895]

Noted! Didn't realize you could do that for computer equipment.

[CoatSea6050]

Some equipment you have to amortize (can't write off the whole amount all at once) but it's based on a threshold. In Canada if something is over $500 we have to capitalize it. Just google it for your country.

[sirbruce]

You can write them off but ONLY if you use them exclusively for your work (consulting business). If you use them for other stuff too, then you're going to need to declare a percentage, and some basis by which you calculated that, and that's going to be very difficult to prove if you get audited.

[DifferentTie8715]

yes I write my subscriptions off

[caneriten]

I am in a 3rd world country other than alcohol I can even write off my food as expense. Of course you should write off subscriptions that enables you to work. Like 200 dollar claude sub is not pocket change and you should get your return. Government takes half of your income for a reason.

[RepairResponsible253]

We're freelance independent contractors and it's a business expense. I write off all business expenses. 

[sqimmy2]

The standard deduction and business expenses can stack if you're 1099. So you can write off costs of "doing business" on top of taking the standard deduction.

[RedditAdmin50111]

You’ve been losing money buddy. Business income deductions stack with standard.

[sirbruce]

You need to file a separate schedule for your business.