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Is there a difference in tax break wether i include my expenses in the 1099 income section or the w2 section? also, where do i include musical instruments? thanks.

for example, I use lots of cab services. some are for 1099 (self employment) gigs, and some are for gigs with a company that pays me with a w2. can I put all of those travel expanses together in the "income and expenses" section (instead of dividing some to the deductions section? also, in case i bought musical instruments to use in both cases (w2 and 1099 gigs) is there a "better" way for me to post that expanse? do i include it as an "asset" in the "income & expenses" section or as an instrument i used in the diductions section? thank you very much.
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AmandaR1
New Member

Is there a difference in tax break wether i include my expenses in the 1099 income section or the w2 section? also, where do i include musical instruments? thanks.

Yes, there's a big difference. You should enter the expenses related to earning the 1099 income, in the self-employed business section and enter the expenses related to the W-2 under the Job expenses section. 

Expenses deducted as self-employed are far more advantageous. Musical instruments would be assets if you use them to earn income and they last longer than 1 year. If they're less then $2,500, you can select the De Minimus election to enter these costs as expenses, which the software will ask you about under self-employed Assets/Depreciation. You'll need to determine where to deduct your assets based on the above information. If you are primarily self-employed it may be easier to enter them only in that section and enter a percentage for the amount of time they're used for earning self-employed income.

Self-employed expenses are deducted from your related income on a schedule C, before the net income amount flows to your personal tax form 1040. Employee job expenses are an itemized deduction, so your total itemized deductions must be greater than the standard deduction  ($6,300 single/$12,600 married) to get any benefit. Additionally, your total employee job expenses are first reduced by 2% of approximately your total income (AGI - a subtotal on your form 1040 line 37). 

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1 Reply
AmandaR1
New Member

Is there a difference in tax break wether i include my expenses in the 1099 income section or the w2 section? also, where do i include musical instruments? thanks.

Yes, there's a big difference. You should enter the expenses related to earning the 1099 income, in the self-employed business section and enter the expenses related to the W-2 under the Job expenses section. 

Expenses deducted as self-employed are far more advantageous. Musical instruments would be assets if you use them to earn income and they last longer than 1 year. If they're less then $2,500, you can select the De Minimus election to enter these costs as expenses, which the software will ask you about under self-employed Assets/Depreciation. You'll need to determine where to deduct your assets based on the above information. If you are primarily self-employed it may be easier to enter them only in that section and enter a percentage for the amount of time they're used for earning self-employed income.

Self-employed expenses are deducted from your related income on a schedule C, before the net income amount flows to your personal tax form 1040. Employee job expenses are an itemized deduction, so your total itemized deductions must be greater than the standard deduction  ($6,300 single/$12,600 married) to get any benefit. Additionally, your total employee job expenses are first reduced by 2% of approximately your total income (AGI - a subtotal on your form 1040 line 37). 

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