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DJ business overhead costs

PostPosted: Wed Jan 21, 2009 6:37 pm
by TheBartman47
How many have really sat down and calculated all your overhead costs in your business? Does anyone have a "storefront" or rent an office space somewhere, or does everyone have a "home office"? If you have a home office, are you writing that portion off on your taxes? (if you use 1/10th of your house as an office, then 1/10th of everything you spend on your house is deductable... the mortgage payment, utilities, renovations, etc. (except phone and cable are separate).

PostPosted: Wed Jan 21, 2009 7:08 pm
by dokai
That's not quite true, Bartman. Last I heard, only the portion of the house that you use to perform your job was deductible. The example I was given was if an anesthesiologist has a home office, but does his actual work at a hospital, then he can't deduct the costs of the home office. I concede that it's been a couple of years since I spoke to an accountant about this topic. Anyone have any more recent info?

As to the full overhead costs, the obvious stuff would include vehicle and equipment costs (deducted and depreciated in accordance with tax laws), music and video subscriptions, tuxedo cost, dry-cleaning of same, legal and other professional fees, and marketing/advertising expenses. And that's what I came up with in just a few minutes of thought, so I'm sure there are many others.

No, I haven't looked at mine in a while. I'm sure I'd be depressed if I did. :-)

PostPosted: Wed Jan 21, 2009 10:22 pm
by CJ Greiner
As I understand it, you CAN have a home office as a DJ. I think many are afraid of the increased risk of audit that seems to be flagged when you claim a home office. I wish that weren't true... we shouldn't be scared into paying more taxes than we really owe.

Re: DJ business overhead costs

PostPosted: Thu Jan 22, 2009 11:08 am
by djsarge
My understanding with the home office is you can use what ever percentage of your home the home office takes. For example, if your office uses 10% of your floor space, then you can use that 10% as a deduction. However, the office must be exclusively for the use of your business. You can also use 10% of your heating and cooling costs. if you have to replace your roofing, you can use 10% of those repairs.

If you have a space in your home you use exclusively for equipment storage, you can use that percentage too. If you have a room you use exclusively for meeting clients, that can be used also.

As always, check with a real accountant on these issues.

PostPosted: Thu Jan 22, 2009 2:17 pm
by TheBartman47
djsarge has spelled it out correctly. If you use a portion of your house exclusively for business related stuff, then it is deductable. I have a small equpment storage area and a computer with all my files and invoices and such on it that is separate from my regular computer for surfin' the web.

PostPosted: Fri Jan 23, 2009 2:42 pm
by djmc
CJ Greiner wrote:As I understand it, you CAN have a home office as a DJ. I think many are afraid of the increased risk of audit that seems to be flagged when you claim a home office. I wish that weren't true... we shouldn't be scared into paying more taxes than we really owe.


well said....I think its better to fly below the radar, and not take the Home Office Deduction.

PostPosted: Fri Jan 23, 2009 5:57 pm
by TheBartman47
If you are claiming other things on your return that are business related, they should expect you to have a home office if you aren't claiming a separate building or rent payment for another place. I've been claiming the home office for the past 5 years with no problem. It doesn't make a huge difference, but every $20 helps.

PostPosted: Mon Jan 26, 2009 12:24 pm
by djmc
TheBartman47 wrote:If you are claiming other things on your return that are business related, they should expect you to have a home office if you aren't claiming a separate building or rent payment for another place. I've been claiming the home office for the past 5 years with no problem. It doesn't make a huge difference, but every $20 helps.


I'm sure there is a creative way to shift some of these expenses into other categories, without raising a red flag.

In any event, I always like to have something in "reserve" that I can use if something gets questioned. That way, if you get audited--- the result will be a "wash" (no tax increase).