Scarlett Posted July 15, 2021 Share Posted July 15, 2021 For someone who owns a small online business, what are some examples of things that could be considered tax write-offs? How do you go about processing these items so you get reimbursed for them? I am trying to make sense of this but it is all getting lost on me! lol 1 Quote Link to comment Share on other sites More sharing options...
Damon Posted July 15, 2021 Share Posted July 15, 2021 Anything you buy for said work or business, can be used as a work expense. Buying work equipment, clothing, supplies and so on can be applied to your taxes. Of course, this doesn't mean everything can be claimed. I'm only aware of work expenses. But, I believe you can also get a tax right off if you donate to a cause or anything. Other than that, I'm not sure what else you could qualify for. As well, I believe it depends on the state you're in as well. 1 Quote Link to comment Share on other sites More sharing options...
James Posted July 15, 2021 Share Posted July 15, 2021 You only will get a refund if you overpay. The government is not going to reimburse you though for your expenses. You get to deduct expenses against gains to reduce the gain to the point where you either have no gain so no taxes or as little gain as possible all depending on your goals. You need to keep track of all the expenses for your business and keep good books to understand the flow of capital. When you are doing your taxes its all going to boil down to the net profit line to figure out how much you owe. Quote Link to comment Share on other sites More sharing options...
Emma Posted July 16, 2021 Share Posted July 16, 2021 What about people who buy items for YouTube videos? I always hear of them saying things like "I have to show this in the video so it can be a tax write off" and they imply they are getting their money back for it. That doesn't seem to be the case based on what you said @James Quote Link to comment Share on other sites More sharing options...
Rachel Posted July 16, 2021 Share Posted July 16, 2021 7 hours ago, Emma said: What about people who buy items for YouTube videos? I always hear of them saying things like "I have to show this in the video so it can be a tax write off" and they imply they are getting their money back for it. That doesn't seem to be the case based on what you said @James Like those who do unboxings and video reviews? That is a good question, because I could see it being a work expense. But not 100% sure. I'll let James answer that. 🙂 1 Quote Link to comment Share on other sites More sharing options...
James Posted July 16, 2021 Share Posted July 16, 2021 18 hours ago, Emma said: What about people who buy items for YouTube videos? I always hear of them saying things like "I have to show this in the video so it can be a tax write off" and they imply they are getting their money back for it. That doesn't seem to be the case based on what you said @James Well if your media company reviews products buying the product of course would be an expense that will reduce taxable income. You see its not really a "refund" it is just a reduction in net income which leads to a reduction in what can be taxed. When a company has negative net profit you are not going to get a refund you just wont be paying anything. Just like when our company sends off products to people that do unboxings it is a marketing expense for us that reduces overall taxable income. Hopefully that makes it a bit more clear :). 1 Quote Link to comment Share on other sites More sharing options...
Emma Posted July 22, 2021 Share Posted July 22, 2021 On 7/16/2021 at 2:41 PM, James said: Well if your media company reviews products buying the product of course would be an expense that will reduce taxable income. You see its not really a "refund" it is just a reduction in net income which leads to a reduction in what can be taxed. When a company has negative net profit you are not going to get a refund you just wont be paying anything. Just like when our company sends off products to people that do unboxings it is a marketing expense for us that reduces overall taxable income. Hopefully that makes it a bit more clear :). So what do they save on it? Like when someone actually buys an item for a YouTube video with their own money. Do they get money back from it or just the taxes on the product? That is where I am confused. Quote Link to comment Share on other sites More sharing options...
James Posted July 22, 2021 Share Posted July 22, 2021 18 hours ago, Emma said: So what do they save on it? Like when someone actually buys an item for a YouTube video with their own money. Do they get money back from it or just the taxes on the product? That is where I am confused. Well lets keep the math super simple and make an example that I hope is easy to understand. Say your business has made $1000 in net profit so far for the year. You go out and buy an item to review on your YouTube channel and it cost you $100. So now your net profit is $900. So now you are getting taxed on $900 instead of $1000. So not a refund expenses just reduce taxable income. 1 Quote Link to comment Share on other sites More sharing options...
Emma Posted July 29, 2021 Share Posted July 29, 2021 On 7/22/2021 at 4:29 PM, James said: Well lets keep the math super simple and make an example that I hope is easy to understand. Say your business has made $1000 in net profit so far for the year. You go out and buy an item to review on your YouTube channel and it cost you $100. So now your net profit is $900. So now you are getting taxed on $900 instead of $1000. So not a refund expenses just reduce taxable income. Oh so it is tax deductible in that sense! Now I get it. That actually helped me a lot, thanks! I am not sure what I was misunderstanding before. 1 Quote Link to comment Share on other sites More sharing options...
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