How to Turn Everyday Expenses Into Tax Write Offs

welcome back guys in today's video I'm going to explain to you how you can Leverage The Power of the tax code to write off a variety of everyday expenses I'll also be answering some key tax questions from some of my subscribers right at the end of this video so without further Ado let's dive [Music] in all right first thing we're going to cover is employees versus business owners because not everyone is allowed to take the same expenses in fact the general rule of thumb is that business owners are eligible for a much wider array of

tax deductions compared to W2 employees and the reason why this is the case is because the IRS views being an employee significantly less risky compared to being a business owner you see business owners often have to invest their own money they have to make difficult decisions that can make or break the business and they have to hire and fire employees all of these things take a lot of risk but the country still desperately needs entrepreneurs to create businesses so that people can have jobs and that our economy can continue to thrive so the IRS creates

tax benefits for business owners ERS that can help to incentivize them to create and run businesses you see under code section 162a when it comes to tax writeoffs for business owners this is arguably the most important Internal Revenue code code section 162a states that business owners are allowed to deduct expenses that are ordinary necessary and reasonable in the pursuit of the business income what this means for you taxpayer is you can potentially write off thousands of different kinds of expenses as long as you make them in the pursuit of business income this op up an

entire world of tax deductions that you could potentially qualify for but not everything now that we've talked about why business owners are allowed to write off everyday expenses let's go over some of the expenses that you could potentially write off on your tax returns starting off with home related expenses if you work from home your home office is your primary place of business and if you use your home office exclusively and regularly for work then you will most likely be able to write off your home office your home office does not necessarily have to be

an actual office space it could actually be an old bedroom that is converted into an office or a section of your basement or even an unattached garage a studio or greenhouse because your home office is located at your home you get to deduct a portion of the everyday expenses associated with your home these expenses can include mortgage interest rent your internet electricity your renters insurance and much more there are two ways to claim the home office deduction you can use the simplified method or the regular method with the simplified method you can deduct $5 for

every square foot for a total of up to 300 squ ft this would result in a maximum amount of deduction worth up to $1,500 now the regular method is more detailed with the regular method you can calculate the percentage of your home that you use for business and apply that percentage to your actual home expenses for example if your home office is 200 S ft and your home is 2,000 ft your office would be 10% of your home you can deduct 10% of your eligible home expenses so if you have a home office you could

potentially get a significant tax deduction for many of the costs associated with your your home overall reducing your tax bill but what about your laptop you see most business owners in the modern day need a laptop laptops can be used for a wide variety of business purposes for example you may use your laptop to send emails create documents set up advertising campaigns and do basic graphic design or build out a website but the good news is that the IRS allows you to write off a laptop because it is a legitimate business expense now you might

be wondering what about if I don't use my laptop 100% for business this is a good question the answer is is that the IRS allows you to write off that percentage of your laptop that you do use for business so if you bought a laptop for $22,000 and you use the laptop 80% of the time for business then you would be able to claim 80% of the laptop's cost on the tax return which would translate to about $1,600 in a deduction but what about your cell phone just as you can write off a laptop if

you use it for business you can also write off a cell phone if you use it for business as well the same rule applies to computers and cell phones so you can write off the portion of your phone expenses that you use for your business so if you buy any very expensive iPhone that cost $11,000 and use 60% of the business phone you can write off $600 of that ,000 that you spend for that iPhone and if you happen to have more than one phone that you use for business then you can write off the

other phones too don't make the mistake of thinking you can only write off one of your phones if you have more than one vehicles in order to write off vehicle expenses you must use your vehicle for legitimate business purposes the deduction that allows you to write off vehicle expenses related to the business use of your vehicle is called the vehicle tax deduction just like the home office tax deduction there are several ways to calculate your vehicle tax deduction the first is called the standard mileage method with the standard mileage method you track how many miles

you drive for business purposes and then multiply those Miles by the IRS approved rate this method is particularly useful for people who want to simplify their tax deductions in 2025 the standard mileage rate is 70 cents personal miles do not count only business miles so if you drove a th000 business miles in 2025 you would get a deduction of $700 using the stand standard mileage method now the second way to calculate your business mileage is with the actual expense method as the name implies the actual expense method involves adding up all of the costs incurred

for operating your vehicle if you multiply all of these expenses by a percentage of time that the vehicle is being used for business purposes could be substantially large let's say that you use the vehicle 50% of the time for business purposes and this year there was $10,000 worth of expenses You' be able to deduct $5,000 of the actual expenses on your tax returns it's also possible to write off a massive portion of all of the vehicles purchase price using Code Section 179 in bonus depreciation in the first year if you would like a detailed breakdown

of how to use code section 179 in bonus depreciation to write off your vehicle then check out this video right here how about meals this is one of my favorite everyday expenses to write off if you own a business then you can write off 50 up to 100% of your cost of your business meals however there are stricter rules for riding off business meals that you need to be aware of for example the meal must be directly related to your business activities this means it should have a clear business purpose such as a meeting with

a client or discussing business strategies or entertaining potential business partners but for most business meals you can write off 50% of the cost this includes meals with clients customers business associates and the covid-19 pandemic relief allowed businesses to write off 100% of qualifying meals through 2022 purchased from a restaurant as a ways to help the restaurant industry however the expansion of this deduction for Co has expired and now this deduction is back to 50 % so if you're providing meals for employees out with a workplace such as lunch for your team during a meeting these

meals may be fully deductible depending on the situation so it is important to keep detail records to validate your business meal deductions the IRS requires the following details for business meals date location amount spent including the tip now what about the business purpose why was the meal or the business related event happening this is one of the most important parts and plus if you have a list of all of the people you ate with this is now you doing what's called best practices as a business owner As Long as You Follow all of the rules

and document your business meals correctly you can potentially save a substantial amount of money by simply eating every single year last but not least is travel many of us love to travel and I definitely am one of these people one of the nice things about being a business owner is that sometimes it does give you the opportunity to travel if you are a business owner Then There are a wide variety of travel expenses that you might be able to write off for example you might be able to write off transportation costs such as airfare bus

tickets train tickets or car rental fees you might be able to write off your lodging cost such as staying at a hotel a motel or an Airbnb plus there can also be many other miscellaneous fees that you can deduct while traveling for business including tips to Bell hops Hotel staff or taxi drivers access fees baggage fees all of these things are important when traveling for business but first the trip must serve as an actual business purpose for example you might be able to go meet with a new supplier conducting Market res search looking at a

site for a new office if you're just going to visit your aunt suie in Las Vegas because you haven't seen her in a while and you also want to play some Blackjack that's not going to fly with the IRS keep in mind that you're going to need some type of documentation to justify your business travel expenses the more documentation you have the better so keep copies of your receipts create a travel log and even keep a record of your business itinerary if you can be aware that as you take more and more writeoffs and make

more and more money these things become extremely important to you be aware to write off travel you have to leave your tax home a tax home is the general area of your main place of business or employment so if you live in Charlotte North Carolina the city of Charlotte would be your tax home and you would have to leave Charlotte in order to write off your business travel expenses you can't just post up at a hotel right down the road from your business location for a few days and write it off as a business expense

doesn't work like that all right moving on here's a question that came in from one of my subscribers that I'm going to answer I get a lot of these questions but before I do so I just just want to remind everybody that if you're watching this video right now you still have time to sign up for the taxfree wealth challenge this is a virtual event taking place on March 10th through March 14th it's the biggest digital tax conference in the world I put on this conference for 5 days to spend time with you showing you

Tax Strategies that the top 1% of tax earners are leveraging every single year the link is in the description below if you're interested now back to the subscriber question this question came in from JC assist on my crypto tax updates for 2025 you need to know check out that video if you have not seen it the question was is can I use the losses from my crypto to offset my taxable income or get a refund the answer is yes but you're only able to use up to $33,000 of capital losses against other forms of income

such as W2 or 1099 and yes you can receive a refund from it my name is Carlton Dennis if you like this video I need you to do something for me like comment subscribe you know what it is I need to see that feedback and I look forward to seeing you on the next video cheers