In terms of the home office deduction the home office needs to be a dedicated space that is not used for personal purposes. This is more or less unverifiable.
A friend was (RIP) a harpsichord player and owned four harpsichords. The square footage the four harpsichords and their benches occupied was clearly not used for anything other than practicing the harpsichord, so it was deductible home office space, even though in two cases it was in the middle of their living room.
When I hung a shingle as a consultant I basically wasn’t really using my office for anything other than work so I deducted it as a home office.
If you’re doing the InstaCart from your phone at the kitchen table where you also eat then calling that a home office is pretty sketchy. They’ll never question it, but it’s not technically correct. But if you are an empty nester and have a large house and you are mainly doing the InstaCart stuff in a room that doesn’t get used for anything else then that counts.
It kind of perversely hurts folks with smaller homes who can’t afford to have single-purpose spaces.
Doesn’t deducting home office space have implications later? I didn’t want to complicate something that was better off kept simple. It’s a tiny fraction of my house too.
If you depreciate the purchase price of the house as a home office expense then yes. Don’t do that … it’s not worth the headache IMO. (My father would vehemently disagree.)
The easiest thing to do is deduct $5 per square foot up to a max of 300 square feet.
You might get a higher deduction if you actually list out your expenses, especially if you have a mortgage and hire a cleaning lady, yard service, etc. That’s more work, especially the first time you do it.
Deductible home office expenses: the proportion of your house that is home office multiplied by:
Depreciation if you’re glutton for punishment
Rent or mortgage interest
Utilities
Property tax
Cleaning lady
Yard services
Repairs & maintenance (such as a new roof)
A crap ton of more esoteric ones and probably something I forgot
Any property tax or mortgage interest deducted as a home office expense cannot ALSO be deducted on your Schedule A. Like if your house is 10% home office and your property taxes are $8,000 then you put $800 on your Schedule C and $7,200 on your Schedule A. If you’re getting burned by SALT caps this is a nice way to deduct an extra $800.
I’m not going thru all that to deduct 100 of my 2900 sq ft no thx.
If there were a simple no-strings-attached $5 x 100 = $500 I wouldn’t lose that deal.
I had no doubt that you’d understand the math, at least once the effect was pointed out. The path that works out better performance-wise will depend heavily on how much volatility you experience.
Myself, I’d be very uncomfortable without at least a few months of low volatility buffer. To each their own, right?
Let’s go back 10 years and say $20,000 is three months of buffer.
Person A keeps that in a low-interest savings vehicle. It earns 3% per year and grows to $26,878 after which the stock market tanks, and that person uses to this money to avoid selling off stock during the three months.
Person B invested that amount in the S&P 10 years ago, so it earned 13.06% per year and grew to $68,253. The stock market now tanks, and he has to sell the fund at the lower price. As long as the stock market didn’t tank more than 60.6%, the guy in stocks is still ahead.
I recognize that the example above is an exaggeration because the S&P has had a great run while inflation was low and interest rates were trivial for a chunk of time. The timing is also an issue, if the draw down happens at the end it’s not as painful.
I actually am in the process of pushing more into bond-like investments, I’m just trying to decide on exactly what.
You’re going to need to go back about 30 years to find much historical investment performance in bonds. The reason for this is that interest rates have been terribly low. Now that you can better bond interest rates the case for holding bonds going forward is much better.
The main argument for bonds in your portfolio though is ballast so that if the market really takes a dump not all of your assets will be hurt so badly.
I still carry cash. At least $50 in my wallet. Basically, enough to buy lunch or a few beers in my day to day travels. I seem to observe that most people who are younger than I am do not. They rely on their debit/credit cards 100% of the time. I rely on my cards like 90% of the time, but I don’t use them for transactions that are under $15 (although now I can break $15 for lunch at MCD’s it seems).
As a parallel, I see the comfort in having a LVB.
I just HATE interest. The income tax on interest is absurd.
I carry cash, but mostly for tips and only for those who deserve it. Mainly, because I do not want coin change, and no, I do not want to round up my bill, thank you for asking (Grr). So, if I were to pay for stuff in cash, I’d also be carrying around change, to lessen the amount in my giant urns of coins. So, I’m charging everything for the airline miles and hotel stays. Oh, and if I am going to be charged for using my card at the P.O.S., then I will consider that company a P.O.S. and stop patronizing.
(I do not like the fact that my wife now knows where I go based on the charges, since she is in charge of paying the charge card bills…)
100%. Same as fast food restaurants that ask for a gratuity before the food is delivered, so they know whether to spit on it or not. No thanks, full stop.
Sometimes, we actually do think alike!
Wife’s school is having a fundraiser of some sort at the local The Habit. I do not want to go due to the triple-insult – kiosk, tip for good service before service begins, and Pepsi fountains – but I will likely be made to go, for the kids.
What I’d like to do: Call out to the people servicing my food: “A tip if I get my bag of food in 5 minutes. Cuz service!”
Apparently with 0 withholding allowances, our disparate incomes still results in a large tax bill of nearly $10k. Weird. Good thing we can handle that.
I looked at this some more and the yield comes from buying corporate bonds. Public has a $4 monthly fee for bond purchases if you’re not a premium Public member. You get the premium membership for free if you have at least $50,000 invested on their platform. Public also just added IRAs.
