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Deductions for independent contractor

I have been employed by a bank as an independent contractor and will make 120k this year

I drive one mile to station, park in parking station (have annual pass) and catch a train to the location.. is any or all of that deductible

 

Is my lunch a deduction..

Probably will be able to contribute around 48 k to a SEP 401k this year

 

I get family healthcare under cobra , i have a family plan, which is 36k per year, can i deduct the whole 36k or only the amount that would have covered me, or myself and wife..

 

Any other deductions which might be relevant, do not use home, but buy newspapers for reading for job.. dry cleaning ?

Thank you 

 

 

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6 Replies
Carl
Level 15

Deductions for independent contractor

Commuting expenses between your residence and your primary place of employment are never deductible.

 

Is my lunch a deduction..

No.

I get family healthcare under cobra , i have a family plan, which is 36k per year, can i deduct the whole 36k or only the amount that would have covered me, or myself and wife..

If it's a "business owned plan", then it's a business deduction on the SCH C. There are all kinds of complex rules that govern this to determine if it is "in fact" a bonafide business deduction. In your case I do *not* see it as a business deductible expense of any type on the SCH C.  That's because "you" personally purchased the plan. So it's a SCH A deduction. If the business purchased the plan and met all the requirements for a healthcare plan purchased by a business, then it would be a SCH C business deduction.

Any other deductions which might be relevant, do not use home, but buy newspapers for reading for job.. dry cleaning ?

Newspapers and dry cleaning doesn't cut the mustard as a business deduction for the business owner of a sole proprietorship, single member LLC, or any other type of disregarded entity. Howver, if you have a home office and meet the qualifications (which are hard to meet for many) then you "may" be able to claim a small percentage of your utilities as a SCH C business expenses, as well as the same small percentage of any mortgage interest and property taxes you pay, as a SCH C business expense. There's also the depreciation you're required to take also, and that can help. There's two possible ways to take the depreciation now, but I won't get into that at this time as it's apparent you've got lots to learn still and I don't wont to contribute to "information overland" any more than necessary at this time.

I also recommend that for your first year of reporting business income/expenses that you use the CD/Desktop version of TurboTax. It's much more use friendly, easier and simpler to navigate and "SIGNIFICANTLY" eaiser to deal with in your learning process when it comes to business taxes and stuff.

Your best bet is to go ahead and purchase the CD/Desktop version of TurboTax 2019 and after you install it on your computer do an initial "run through" of the program for at least the SCH C. If you'll do that *NOW* you'll learn quite a lot *NOW* instead of learning it after the fact when it's to late. It will also generate questions from you that I *KNOW* you will need answers to.

So go ahead and get the CD version of TurboTax 2019 now at https://turbotax.intuit.com/personal-taxes/cd-download/   While all versions of the desktop program have the SCH C in them, I recommend you go ahead and get the Home & Business version at least for this first year. It offers more in program help for the SCH C than the lower versions do. Then install it and "pretend" the 2019 tax year is over and start doing your tax return. I have no doubt questions will arise, and myself and others are here to answer them for you.

 

Deductions for independent contractor

Outstanding answer.. 

Deductions for independent contractor

Why the CD version instead on downloading. i seem to remember had issues downloading from cd into mac with no drive. The on line should be same ?

Carl
Level 15

Deductions for independent contractor

Why the CD version instead on downloading. i seem to remember had issues downloading from cd into mac with no drive. The on line should be same ?

When you *DOWNLOAD* the CD version, you don't need a CD drive. What you download is an exact copy of what's on the CD. Just make sure that what you download is for the right operating system. If you download the Windows version, then you paid for nothing because it flat out won't work, or even install on a MAC.

On a MAC, you open the downloaded file, drag the .dmg file to the applications folder and it's installed. No physical CD drive needed. You only need a CD drive if you have a physical CD that you are holding in your hand.

I don't care what others say, and it doesn't matter if you're on MAC or Windows. For a first time user of the program, or for someone experienced with the program and using it for their first time to report business income/expenses on SCH C, the CD version is significantly more user-friendly. The CD version also offers the ability of "forms view", which is flat out not possible with the online version.

In my personal opinion, (we all have them) the online version is just flat out not user friendly and can be difficult to navigate for many. With the "forms view" option available only in the CD version, it makes it a piece of cake to "follow the money" when you need to understand what's going on within the program. It allows you to "see" exactly what was done by the program to get to a specific answer, figure or number. This is not possible with the online version.

 

Deductions for independent contractor


@asquith62 wrote:

Why the CD version instead on downloading. i seem to remember had issues downloading from cd into mac with no drive. The on line should be same ?


If your Mac does not have a CD drive then you can use the Download software from this TurboTax website - https://turbotax.intuit.com/personal-taxes/cd-download/

 

See this TurboTax support FAQ for Mac minimum requirements for the 2019 TurboTax software - https://ttlc.intuit.com/community/system-requirements/help/minimum-system-requirements-for-turbotax-...

 

See this TurboTax support FAQ for troubleshooting any Mac download issues - https://ttlc.intuit.com/community/installing/help/troubleshoot-turbotax-for-mac-download-issues/00/2...

See this TurboTax support FAQ for troubleshooting any Mac installation issues - https://ttlc.intuit.com/community/installing/help/turbotax-for-the-mac-installation-troubleshooter/0...

 

If you choose to use the TurboTax online editions instead of the desktop program you would need to use the Self-Employed edition to report your self-employment income and expenses - https://turbotax.intuit.com/personal-taxes/online/

Note -  The online editions can only be used to complete One tax return per account and User ID.  The online editions do Not have direct access to any Forms, Schedules or worksheets.  If a state program is required there is a separate charge for the state program when using the online editions (except the Free edition)

Deductions for independent contractor

My tax return is done and i am reading about a 20 pct deduction for independent contractors

 

I took a 5k deduction for start up

401k deductions -35k 

Health care costs.. -36k

 

My independent C income was  106k.. did i make a mistake somewhere on the 20 pct ?

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