My wife needs a new computer for a work from home job. We plan to file jointly. I am a student, so I have access to a student discount for computers. I plan to use my student discount to buy a new computer for her to use for her job. I know in general this is a valid expense to write off as a business expense. However, I am wondering if, in the case that we are audited, a student discount showing up on a receipt for a business expense will appear to be a red flag?
You say your wife has a "work from home" job--but you did not mention whether she will receive a W-2 or if she is an independent contractor who will be reporting self-employment income. If she is a W-2 employee, she cannot deduct job-related expenses on your federal tax return. If she is an independent contractor then her business expenses are entered on a Schedule C.
-W-2 employees cannot deduct job-related expenses on a federal return. Job-related expenses were eliminated as a federal deduction for W-2 employees by the tax laws that changed for 2018 and beyond. Your state tax laws might be different in AL, AR, CA, HI, MN, NY or PA.
Using a student discount is no different than buying the item on sale or using a coupon or other discount method. You deduct the actual cost you paid so this is not an audit issue.
@Critter-3 wrote:
Using a student discount is no different than buying the item on sale or using a coupon or other discount method. You deduct the actual cost you paid so this is not an audit issue.
It doesn't matter why you get a discount for any purchase of goods or services, you just report the net price as the asset cost or expense.