I'm shutting down my sole proprietorship & joining another co. as a W2 employee. Can I still deduct items?

Question

I am contemplating shutting down my sole proprietorship and joining another company as a W2 employee.

Having my own business affords me some benefit in the form of deductions/expenses (i.e. I deduct a portion of our mortgage for home office, one of our cars, gas, insurance etc.)

In closing up shop and joining another company, is there a way that I can continue to take some of these deductions (a portion of mortgage, phone bill etc.)? Or does the fact that I no longer have my own formal company preclude me from such deductions when I file my income taxes?

Answer 1

If you'll be using an office at work, you won't be able to continue to claim your home office, portion of the mortgage, etc. or other business-related expenses, since you are no longer running a business. Transportation to get to the office and back isn't deductible either. If the company is putting you on salary but you will be working primarilly from your home, or are required to drive your own car for business purposes, portions may still be deductible. Go to the IRS website at http://www.irs.gov and look at the tax forms and rules that apply to w-2 revenue.

Answer 2

Typically you can't. But, you would need to check with a tax expert or attorney to be sure.