Need help with tax deductions / expenses?

Question

I work for a major media company that deals with video games. I had to register a DBA in order to work for them for tax purposes. I work at home for this company so I would like to know what I can deduct when tax season comes around.

Since I work from home, I'm assuming that my internet bill, phone bill, electricity are all tax deductable. Another thing I had to buy was a PS3 because I will be receiving material to review for my job, so I was wondering how much of that cost I can deduct.

I also want to know if any video games that I purchase and my GameFly membership can be deducted at all?

Thanks!

Answer 1

You can take a percentage of your phone, internet, electricty, etc. based on how much is used for work. You can also take a portion of your rent or mortgage for a home office.

BUT you need to have very, very exacting records. Home office deductions are red flags. You will have to prove you have a separate room used only for work. Keep log sheets of internet usage for work. Phone logs, etc.

Video game just sounds like something auditors would question.

Answer 2

By federal law, the fixed cost of the "first" phone line into a home (in other words, the difference in fixed monthly cost between having zero lines and having one line) can never be deducted. If you have multiple lines, you can deduct the added fixed cost for having more lines, if those lines are used only for business. In either case, you can deduct the charges for business toll calls (long distance) but not for personal toll calls (long distance).

If part of your home is used regularly and exclusively for business, you may be able to deduct a lot -- including a portion of your rent (if you do not own the house). If you do not have a portion of your home set aside for regular and exclusive use, then you cannot deduct any electricity unless you can show how much of the electricity was used for work.

Video games that you buy to play for fun cannot be deducted. You might be able to deduct video games that you buy only for work, but I am not sure how you could document this to the satisfaction of the IRS.

Answer 3

If you're an employee then you can only deduct unreimbursed employee business expenses if you itemize. If they take out taxes and you get a W-2 at the end of the year, you are an employee. If you are an independent contractor and they don't take out taxes and you get a 1099 at the end of the year, you can probably deduct your business expenses on a schedule C

Answer 4

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