Question on write-offs and do's and don'ts

[Dean Valadez]

Can I:

- Purchase clothes (pants, shirts, socks, coats, jackets) that I would wear for doing renovations/rehabs and write them off? 

- Shoes, boots?

- atypical tools, such as a knife or flashlights?

- iPads or other such devices? (for documenting properties, drawing rehab ideas on a digital sketchbook, checking Zillow, etc. I know I can do a lot of this on my phone, but an iPad, even the iPad mini, would be easier to view things, and to sketch ideas, etc)

- iCloud storage? (I had iCloud storage for my personal use prior to getting into this field)

I realize the above items can be used for personal use as well, which is why I am asking. What are some things you wrote off, and what precautions should I be aware of? 

Also, what are some do's and don'ts for write-offs or for the above questions? I am not trying to 'work the system' but I would like to know what is common/typical to do and what are some write-offs that draw questions/red flags.

[Dean Valadez]

Quote from @Account Closed:

Quote from @Dean Valadez:

Quote from @Account Closed:

Quote from @Dean Valadez:

Can I:

- Purchase clothes (pants, shirts, socks, coats, jackets) that I would wear for doing renovations/rehabs and write them off? 

- Shoes, boots?

- atypical tools, such as a knife or flashlights?

- iPads or other such devices? (for documenting properties, drawing rehab ideas on a digital sketchbook, checking Zillow, etc. I know I can do a lot of this on my phone, but an iPad, even the iPad mini, would be easier to view things, and to sketch ideas, etc)

- iCloud storage? (I had iCloud storage for my personal use prior to getting into this field)

I realize the above items can be used for personal use as well, which is why I am asking. What are some things you wrote off, and what precautions should I be aware of? 

Also, what are some do's and don'ts for write-offs or for the above questions? I am not trying to 'work the system' but I would like to know what is common/typical to do and what are some write-offs that draw questions/red flags.

 For cloths, they need to be cloths that you cant wear outside of work. For instance, a new suit is not a write off, but a uniform for your business is. Tools like knife etc if have a business use you can write off. Same with iPad and cloud software. 

Generally, you need tie back a business use for your item in question. 

I hope that helps! -Zack 

Thanks, Zack. I do have an LLC. But what are some "don'ts" to the above? In other words, if I purchased some work pants for me to do rehabs, are you saying I can't wear them on non-working days? (I am not talking about suits nor uniforms, but work pants that I use while doing rehabs.) What are write-offs that raise red flags?

Where do such items (clothes, iPads, flashlights, etc) cross too far into non-business use, and does that draw a red flag?

 So for the clothing, if it was just "a pair of jeans that fit just right" (and a radio :P) It wouldnt be a write off because you can wear that outside of work. However if these jeans had the logo of your company on it, it would count as a write off.

Generally speaking, your being conservative if all your write offs you can tie back to a fair reason why you need them in your business. That new flat screen 60 inch TV you need for "zoom calls" might be a write off if your actually using it for zoom calls. However if you decide to get those new power tools you want on the business credit card and your business is a tax firm like us, its going to be hard to justify to the IRS (and your wife) why it was a valid purchase for tax purposes. 

I hope that helps!   

 How do I 'tie' them back to my business? I am looking for specifics as to how to do these things since I am new to this field. Do I keep a record of it somehow, and, if so, what is a recommend way to keep this record?