Tax question?

Question

I'm working for my brother's web design company as a contract worker. I get paid with a check and no taxes taken out. I know I will have to fill out the 1099 form and pay my own taxes but I was wondering about deductions

1. Since I am self employed is my house my office and does that mean traveling to my brother's office is deductible mileage?

2. My brother's office is downtown and marking is $75 a month is that deductible

3. My cell phone is used for business it that deductible?

4. Is paying for online training deductible?

Answer 1

If your work is done at home, and you just travel to your brother's office occasionally to confer with him, then your mileage to and from his office and the parking for those tripts could be deducted, and you might be able to take a home office deduction but ONLY if you use some portion of your home regularly and EXCLUSIVELY for business - if you have for example a desk in a corner of a bedroom that's also used occasionally as a guest room, then no home office deduction. If you do any significant portion of your work in his office, then none of this would be deductible. The fact that you have a $75 parking pass, rather than just paying for the times you go there, would tend to indicate that you go there regularly, which would argue against being able to deduct the expenses for the trips.

The portion of your cell phone use that's used for business can be deducted.

Online training might be deductible, but not for sure - it depends on just what the training is. If it's to sharpen skills you already have, it probably is - if it's to give you new skills, probably not. If you've already been doing web design for other customers and reported that income, you'd probably be able to deduct the additional training if it's web design related.

Good luck.

Answer 2

Since you are a contract worker and no taxes are being deducted, you should pay some quarterly taxes (fed and state), otherwise you may be charged with a penalty when you file next year.

Your house (or portion thereof) is only deductible as an expense if business is conducted from there. It sounds like you travel to your brothers office to work, therefore, it's not likely that you are working from your home. Also, the mileage from your home to his office is considered "commute" and therefore not deductible. If you have to drive to perform the duties of the job (i.e., service clients, get product, etc) then that is deductible - and you need to keep records. A portion of the phone can be deducted (percent used for business). If the training is directly related to the job, this may possibly be deducted. The key here is maintaining good documentation and adequate records/proof.

Below is a link that may be helpful.

Answer 3

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