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New Member
posted Jun 3, 2019 12:22:55 PM

Can you deduct Netflix, HBO, amazon and games somewhere on turbotax. I'm a visual effects artist and use it for research.

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1 Best answer
Level 7
Jun 3, 2019 12:22:56 PM

First, whether an expense is deductible depends on whether it is ordinary and necessary for your trade or business.  You would want to look at what is appropriate for your industry - is it typical that visual effects artists use these subscriptions for research purposes?  Is this research necessary to your business?   

See the following quote: "To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary."

https://www.irs.gov/businesses/small-businesses-self-employed/deducting-business-expenses

But, these types of expenses are hard to sustain on an audit if you were ever questioned about it as there is likely to be a considerable personal aspect (non-deductible) to these expenses.  So, you are going to want to be able to distinguish (and prove) between the business-related uses of Netflix compared to the personal use of it.  For example, if you determine that you use these items about 50% of the time for business purposes and the other 50% for personal - only deduct 50% of the cost of the subscription or item.   You may want to keep a log showing the times you are using the services for work purposes.

To enter in TurboTax -

  • Log into your account and click Take Me To My Return (you must click this before searching if you are not already in your account)
  • Type “Schedule C" in the search box, top right of your screen, then click the magnifying glass
  • Click the "jump to schedule c" ink in the search results.
  • You will arrive at the Your Business summary page where you can add/edit a business
  • Follow the onscreen instructions to establish a business profile (if you haven't already) and enter your business income and expenses
  • When you get to Business Expenses - scroll to the bottom of the list and select Less Common Business Expenses (or select add an expense if you land on the summary menu because you have already gone through the expenses once)
  • Choose the Miscellaneous Expenses option from the list
  • Enter the amounts you paid for misc expenses with a description 

1 Replies
Level 7
Jun 3, 2019 12:22:56 PM

First, whether an expense is deductible depends on whether it is ordinary and necessary for your trade or business.  You would want to look at what is appropriate for your industry - is it typical that visual effects artists use these subscriptions for research purposes?  Is this research necessary to your business?   

See the following quote: "To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary."

https://www.irs.gov/businesses/small-businesses-self-employed/deducting-business-expenses

But, these types of expenses are hard to sustain on an audit if you were ever questioned about it as there is likely to be a considerable personal aspect (non-deductible) to these expenses.  So, you are going to want to be able to distinguish (and prove) between the business-related uses of Netflix compared to the personal use of it.  For example, if you determine that you use these items about 50% of the time for business purposes and the other 50% for personal - only deduct 50% of the cost of the subscription or item.   You may want to keep a log showing the times you are using the services for work purposes.

To enter in TurboTax -

  • Log into your account and click Take Me To My Return (you must click this before searching if you are not already in your account)
  • Type “Schedule C" in the search box, top right of your screen, then click the magnifying glass
  • Click the "jump to schedule c" ink in the search results.
  • You will arrive at the Your Business summary page where you can add/edit a business
  • Follow the onscreen instructions to establish a business profile (if you haven't already) and enter your business income and expenses
  • When you get to Business Expenses - scroll to the bottom of the list and select Less Common Business Expenses (or select add an expense if you land on the summary menu because you have already gone through the expenses once)
  • Choose the Miscellaneous Expenses option from the list
  • Enter the amounts you paid for misc expenses with a description