2014 Odd deductions, job hunting, new home

[kgtest]

There are always such gray areas in the tax laws.

I recently started an S-corp and have never really itemized before this...well I deducted a few things like job hunting expenses, tax prep, and auto registration and mortgage insurance...all "typical" deductions but never anything odd.

Well this year has been pretty odd for me. I had to look for a job twice this year, once involved travel from an island to mainland...so plane tickets and rental car that I covered to get my new job. I did get the new job, success! but are the plane tickets and rental car deductible?

Can I even deduct job hunting expenses twice in a year? The second time around, some of the expenses I WILL/have incurred are related to my s-corp but that is a whole other deal.

I needed to smell good, and look good too in order to get the job, are those expenses like deodorant, perfume and a haircut deductions?

My DH is W2, but offices out of our home...I am wondering if she qualifies for any deductions. Man I think I might need an accountant to help me sort some of this odd stuff out.

Are there any oddball things I can deduct by getting into a new home? Obviously Mortgage Insurance but are there things I might be missing for 2014? It's my understanding any appraisal fees are deductible as well, and I know I pad for at least one.

Another oddball, I bought a pickup *over 6,000lbs which I use primarily for business, I believe there is another 179 itemization right there...again this means I qualify for home office etc.

Obviously your deductions are only as good as your records and proof.

 

[Senator]

You will not be doing any 'itemizing'. These things are either a business expense, or not. You do not itemize a business expense. It is an expense, assuming your income comes into your S-corp, not yourself as a W2. You might get a 1099, but likely not as you are a corporation.

The truck, yes. Only the percentage that you use for business.

You have personal expenses, like the home mortgage interest/insurance. They are not corporate expenses unless your corporation owns the property.

Expenses like deodorant, perfume and a haircut deductions, likely not. Potentially if you were a movie star or stripper they might be.

Plane tickets and rental car that I covered to get my new job, might be travel expenses of the Corp, not job hunting expenses of your own. Plus a daily per diem.

My DH is W2, but offices out of our home, likely not deductible. But your S-Corp can probably deduct $1500.

Can I even deduct job hunting expenses twice in a year? Yes, even 10+ times. Not every sales call results in a sale. If you are acting as part of the Corporation, it is sales and marketing, not job hunting.

 

[kgtest]

Senator, thank you sooo much for resetting my way of thinking. As you can see I am still stuck in Sole Proprietor mode lol.

 

[pb4uski]

+1 to what Senator says.

From what you write it sounds like you are on thin ice. The fact that you are even asking if deordorant, perfume or haircuts are deductible is a red flag since such costs would rarely be deductible. An S-corp does not allow you to deduct personal expenses anymore that you can on a Schedule C.

I can't envision where job hunting expenses are deductible by a S-corp or Schedule C unless you are talking about sales/promotion/marketing costs.

Certain job hunting expenses are deductible as a miscellaneous deduction, see Job Hunting Expenses

I would not bother with the home office deduction, it is typically much more trouble than it is worth, not to mention restrictive.

Appraisal fees are not deductible.

Items not added to basis and not deductible. Here are some settlement and closing costs that you cannot deduct or add to your basis.

1. Fire insurance premiums.
   
2. Charges for using utilities or other services related to occupancy of the home before closing.
   
3. Rent for occupying the home before closing.
   
4. Charges connected with getting or refinancing a mortgage loan, such as:

• Loan assumption fees,
  
• Cost of a credit report, and
  
• Fee for an appraisal required by a lender.

​

You can either invest the time to learn this stuff or pay a pro to help you - I suggest you find a good pro to help you out.

 

[38Chevy454]

I agree, you need to separate the business expenses (S-corp) vs personal expenses. That is the root of your confusion, and you really need to get a better understanding of the tax rules and what applies to business vs personal. Do you work out of your home? if so the home office deduction may work, but be mindful of the rules to avoid potential tax problems. Take it if legit, no need to give IRS any extra as long as you can meet the rules.

I applaud your creativity, but I am sure the IRS would not consider deoderant, toothpaste and personal grooming as qualified business expenses. Special clothing (uniforms, etc), or safety type equipment, would be examples of legit business expenses since you need those to do the job; if not reimbursed by employer of course.

Truck you can either take depreciation (that sec 179 reference you made), or mileage used for business. Again, learn the IRS rules and take what is legit.

 

[kgtest]

I definitely understand *MOST of the rules. I wouldn't doubt if there was someone somewhere who tried to take a deduction for toothpaste.

I do believe, if one was taking a deduction for job hunting expenses, outside of even a business deduction you could likely quality a haircut though. It looks like up to 2% of your itemized deductions...and yes this is separate from an s-corp deduction...so that is noteworthy

Maybe not 10 haircuts though.

Part of this was meant to be for discussion.

What about things like office sofa and whiteboard. Those seem pretty obvious deductions to me for a person who has a home office.

As for the IRS rules, the rules that apply to my taxes are pretty complicated. I understand this forum is not the place for a specific persons tax situation.


These are meant to be more general questions. Here's another gray area though, say I do home repairs I do know a percentage of the costs spent upgrading your home can be claimed as a deduction. The specific home repairs are not so obvious in the "rules" though...like say I change a door lock on my office door, or I pay a service to come and steam clean the carpets, or perhaps replace carpets, and a separate service to re-screen the window screens on the office windows and really a whole house. Would all of those be included in this percentage of home repairs or just SOME?

As for Senator, say a person hosts an event at there office, and they spend $100 on appetizers and drinks, for this event, and maybe $50-100 on supplies and materials to disperse for the particular event and plastic-ware. Than spend maybe another $50-100 on advertising for the event. Is all of this $300 going to be a business deduction? These are real gray areas I feel even an accountant or tax pro would have a tough time qualifying.

As for my personal situation, my DH files 2106 so it further complicates things.

Obviously if you are itemizing personal deductions for your business or vice versa things are not going to work out nicely for you, that I understand. And of course having records of all of this is key as well, not just a receipt, but a log would be even better in my experience.

 

[Senator]

As for Senator, say a person hosts an event at there office, and they spend $100 on appetizers and drinks, for this event, and maybe $50-100 on supplies and materials to disperse for the particular event and plastic-ware. Than spend maybe another $50-100 on advertising for the event. Is all of this $300 going to be a business deduction? These are real gray areas I feel even an accountant or tax pro would have a tough time qualifying.

Definitely not a gray area. It is deductible. If it is for meals and entertainment, it is subject to a 50% limitation. If it is for advertising, it is 100% deductible. It somewhat depends on who is invited.

The employee expenses of a party are 100% deductible, if the general public is invited, it's 100%. If clients, then 50%. If just a bunch of your friends, then 0%.