| Freelancing from home and taxes |
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Freelancer
Member
Cash: $ 2.95
Posts: 14
Joined: 11 Aug 2005
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| Freelancing from home and taxes |
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Background: My husband has a "regular" job and does freelance writing on the side from home, so he's been able to deduct some home-office expenses. I'm currently a grad student and do some freelance proofreading/editing on the side from home. We're recently married, so this will be the first year that we've both had freelance work from home during our marriage.
My question is: what do we do about the home-office expenses? When we were living separately, we were each able to expense part of our rent, electricity, etc.--pretty obvious and pretty easy. How do we work that out how? On our tax return, we still each have to report that we have freelance income and report what our income and expenses are. I don't know how to accurately report expenses without throwing up a red flag for either A) reporting all expenses on one spouse, thereby leaving the other spouse with income but no expenses, or B) splitting the expenses so that it ends up that one spouse's expenses for this year are way below what that spouse's expenses were last year, even though the income is about the same.
CN: 2 self-employment incomes, 1 set of expenses--how to report on taxes?
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Sat Aug 20, 2005 1:57 pm |
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MattL
Senior Member
Cash: $ 46.85
Posts: 234
Joined: 25 Jun 2005
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| Re: Freelancing from home and taxes |
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quote:
Originally posted by Freelancer
Background: My husband has a "regular" job and does freelance writing on the side from home, so he's been able to deduct some home-office expenses. I'm currently a grad student and do some freelance proofreading/editing on the side from home. We're recently married, so this will be the first year that we've both had freelance work from home during our marriage.
My question is: what do we do about the home-office expenses? When we were living separately, we were each able to expense part of our rent, electricity, etc.--pretty obvious and pretty easy. How do we work that out how? On our tax return, we still each have to report that we have freelance income and report what our income and expenses are. I don't know how to accurately report expenses without throwing up a red flag for either A) reporting all expenses on one spouse, thereby leaving the other spouse with income but no expenses, or B) splitting the expenses so that it ends up that one spouse's expenses for this year are way below what that spouse's expenses were last year, even though the income is about the same.
CN: 2 self-employment incomes, 1 set of expenses--how to report on taxes?
I would simply have one of you claim the expenses. One of you not claiming home office expenses shouldn'tthrow up any red flags.
It may be more confusing and throw up a red flag if you both split the expenses 50/50 and claimed them seperately. It could look like you are claiming something twice.
I'm not an accountant, but that's the way I would do it. To be sure it's best to talk to an accountant.
You could also use Turbo Tax and choose the interview process. It will guide you through everything and create the forms for you.
Debt Elimination
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Sat Aug 20, 2005 4:02 pm |
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Freelancer
Member
Cash: $ 2.95
Posts: 14
Joined: 11 Aug 2005
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Thanks! We do use TT, so we'll plug it in there and see if it suggests anything.
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Sat Aug 20, 2005 9:19 pm |
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