Related: Robert Reich posted earlier today that Tesla paid ZERO taxes on $5 billion in sales (earnings?), so that’s just fucking great.
Related: Robert Reich posted earlier today that Tesla paid ZERO taxes on $5 billion in sales (earnings?), so that’s just fucking great.
Pro tips:
Many jurisdictions don’t require you to have a business license if your revenue is under a certain threshold and the work you do is unregulated. Basically, you can just decide you own a business at any time without filling out any paperwork.
Housecleaning, auto mechanic, and IT consulting businesses aren’t regulated and can be used to justify 90% of common purchases. A YouTube channel is a business and can be used to write off anything you make a video about.
Any major purchases you made throughout the year can be declared as an asset of your business. If you say you only use it for business 50% of the time, it’s practically impossible for anyone to disprove.
Also, 50% of the money you spend on those major purchases can be declared as a business loss, which further reduces your tax obligation.
So, let’s say you bought a PC and a 3D printer this year. You can decalre both as assets belonging 50% to your business, declare half the cost as a business expense, and declare no income from the business. You can also declare half of your gas purchases as being for your business. You’ll get a credit for the asset, and a credit for the “business loss.”
Basically, you can create a company that has your home address as its HQ, say it didn’t earn any money, but you invested in it. Then, declare ordinary purchases as assets and investments into the company by saying you use them for business 50% of the time.
There’s no requirement to have a business license before telling the IRS you have a business. There’s no requirement to run a business “well” and there’s no penalty for running a business badly. Receipts aren’t required to declare assets or losses, but you may need them if you’re audited. You’re unlikely to be audited due to the 50% declaration. If you are audited and you have receipts, you’re covered.
Disclaimer: I’m not a tax professional and this isn’t advice.
I fell like the disclaimer should really be at the top. Specially because it is very geographically dependant and this is the internet.
Maybe. On the other hand, if you choose to act on unreliable or incomplete information, that’s on you.
Part of being a responsible adult is understanding the law and how it applies to you in any situation in which you may find yourself, BEFORE you make up your mind what you’re going to do.
I do programming as a hobby, and it’s not out of the question that some day I’ll make something that will be sold. Can I claim my gaming PC and my homelab as business expenses? As well as my electricity and intenet?
I’m not an expert on tax, but I can tell you from personal experience that for the company that I run, with me being the only employee, I claim anything related to the business. The grey area is what percentage it’s used for the business, I’m not sure on that part. I have a separate laptop I use for the business and when I purchased it I claimed it 100 percent. Like stated though keep your receipts to cover your ass.
As far as I understand tax law (which isn’t very far), when filling out your Schedule C, you can write off 50% of the cost of the PC and lab equipment without raising too much suspicion. You can also claim them as assets and claim depreciation on them. You can also claim the portion of electricity and internet used, unless you’re a full-time W-2 employee working from home.
You can also film yourself doing these projects and upload it to YouTube, which means you have a video production business.
My understanding is this is how most upper-middle class people and minor millionaires legitimately reduce their tax obligations.
The 2025 Big Beautiful Bill lets you write off 100% of the expense on the year you purchase it, instead of depreciating it over several years. Make big purchases, pay less tax dollars to this government.
Disclaimer: I am not an accountant or financial advisor, do your own homework to see what qualifies in your situation.
I feel like this is all well and good until you need insurance. If you damage something and get sued without insurance/LLC, they’re suing you directly instead. Dicey territory depending on what you’re being sued for.
Assuming you’re actually doing work and not just using the business as a loss center, yes.
If you’re actually doing work, it’s well worth your time and money to form an LLC.
However, an LLC can’t deduct the same things as a sole-proprietorship. So, if you simply want a business on paper to serve as a loss center, that’s probably the better choice.
Again, this is just MY understanding of things. I’m in no way trying to give advice or tell you what YOU should be doing, only you can decide what’s best for you.
shit I should have claimed my laptop
If you’ve already filed, you can still do an amended return