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re: Is an LLC Worth it? Freelance Work
Posted on 7/2/25 at 9:24 am to horsesandbulls
Posted on 7/2/25 at 9:24 am to horsesandbulls
I use insurance for liability protection. I carry significant umbrella policy, as well as a separate general liability policy.
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Posted on 7/2/25 at 9:33 am to TheJunction
You do not need an LLC for any of the deductions you mention. You can deduct office space, internet, cell phone. None have to be fully dedicated to your side gig, meaning you can apply a percentage of use to each of these expenses to business and the remaining to personal. Sounds like you should use a professional tax person as a vehicle to educate yourself.
Posted on 7/2/25 at 9:39 am to Puffoluffagus
Maybe one of the cpas here can chime. But home office deduction I've always been told is one of more frequent audit triggers. With that said, there's no reason not to consider claiming the deduction, along with a proportion of internet/phone etc used for business purposes. As long as you meet the criteria for the deduction and can justify in the event of audit.
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My tax guy says he hasn't seen an audit focused on the deduction side in a while. He said they are usually related to the revenue side. Would also love to hear other opinions.
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My tax guy says he hasn't seen an audit focused on the deduction side in a while. He said they are usually related to the revenue side. Would also love to hear other opinions.
Posted on 7/2/25 at 11:30 am to KWL85
Just sent an email to a CPA before checking this thread. The only concern I have is that we do AirBNB our home for a handful of days in the year.. Could see that potentially being an issue..
Posted on 7/2/25 at 1:17 pm to KWL85
I don't think I've ever seen an audit on the business use of home deduction. If OP doesn't think he qualifies, the rules are pretty straight forward (look up Form 8829). If you are afraid your home expenses are abnormally high (think of a large repair bill) and you might trigger an audit, you can always just rock with the simplified method.
Posted on 7/2/25 at 1:48 pm to TheJunction
quote:
We do have a dedicated office at our home, I’ve read differing opinions on if that space is deductible and if we could also include the internet. I understand that any specific business expenses are (like computer, chair, decorations, etc.). Is there anything else?
The key is to follow the IRS regulations carefully. Having a locked door when you are not in there may help. A home office can’t serve any other purposes and be fully deductible.
Your accountant will know.
LLC is beyond my knowledge. I’m a sole proprietor.
Posted on 7/2/25 at 2:40 pm to TheJunction
Been a while since I looked at it, but, main benefit of the s corp is related to taxes - pay yourself a reasonable salary and distribute the rest of the profits. My understanding is 100% of 1099 income is subject to FICA and the distributions are not.
IIRC the sweet spot for us was >100k revenue/income to transition. talk to CPA
IIRC the sweet spot for us was >100k revenue/income to transition. talk to CPA
Posted on 7/2/25 at 8:55 pm to makersmark1
Good thought on locking the door - I’ll bring that up.
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