Receipts for tax purposes?

[John Prophet]

A little advice please...

A guy is coming over today to buy something from me for his business. His wife asked me was I in business for myself (after seeing that I had several items in a local ad paper)...I told her..almost, but hot yet.

Anyway, dude is coming to buy something today and I am wondering about a receipt for tax purposes. I have a sales receipt book with the carbon copy blah blah...since I am not a licensed business...if I write the dude a receipt, can he use it to take off of his taxes?

Let me rephrase it..

Can a person use an item as a tax "write off" if the item was purchased from an individual or does it have to be purchased from a licensed business??

Also if I do wtie him a receipt, do I need to charge him tax for him to get it off his taxes??

The item has already had tax paid on it once by me. (I think, cant remember, ordered it online).

Lastly, if I write him a receipt, does that mean I need to claim the money as income on my taxes??

Any advice?? JP

[J-Excel]

I'm not a tax lawyer but I'm pretty sure you're receipt will be OK for him. You'd have to be in business for him to make a tax exempt purchase, where he pays no taxes on the purchase. And I doubt you'd have to claim it unless you profit significantly. Sounds like you need to meet with a tax advisor.

[John Prophet]

yep..and an accountant, and a lawyer and a....

[n3uxf]

A related question....

What are the rules governing declaring the costs of computer equipment on your taxes? I buolt myself a new system with the past few months. I do some consulting work, and have used/am using the computer to assist me in the job(S). I do not "officially" have a business, and it is just myself, I have not hired or subcontracted to anybody.

[John Prophet]

Dont axe me...I just work here.

[Geotpf]

Originally posted by n3uxf
A related question....

What are the rules governing declaring the costs of computer equipment on your taxes? I buolt myself a new system with the past few months. I do some consulting work, and have used/am using the computer to assist me in the job(S). I do not "officially" have a business, and it is just myself, I have not hired or subcontracted to anybody.

I think the rule is you can deduct the percentage of how much you use it for business (any sort of work, you don't have to be incorporated or anything). That is, if you use it 75% for business and 25% for playing games or surfing the web, you can deduct 75% of the purchase price. But it has to be at least 50%. If you use it less than 50% of the time for business, you can't deduct it at all. But I'm not a tax advisor-I got this from an article in this month's Consumer Reports.

[Chuckiechan]

First, there is not a lot of money involved so if IRS dosen't like your receipt it is his problem, not yours unless he come back to you for a better one. He can buy from anyone he wants.

If you plan to apportion your computer expense, you are getting into "Home Office" territory which requires professional guidance since IRS hates the idea of every Jack and Jill showing losses on a home office against regular income. If you are producing income from your home office, you are running a business and should abide by all of the 10 million regulations and forms that free enterprise requires you to fill out. Oh yea, BTW, the issue is still undecided as to whether your home bath room has to be handicaped equipped since you are an office!!

Keep the hemlock handy!

Cheers!

[n3uxf]

I figure it probaby isn't worth trying to take deductions, with having to jump though flaming hoops over a lake of snapping IRS agents in it to do so, but with just starting my first job in industry, being single and having no deductions to declare, I am kinda nervous about how bad I am gonna get it come tax time, especially with my income level at my job.

Oh well, I guess I will just stick to using it mostly for Q3A and other games.