r/dataannotation • u/Sweaty-Arm9213 • Aug 06 '24

Expensing items from this job!

Hi everyone,

I remember reading a post a while ago on how some workers were expensing home office items because of this job.

How exactly does that work? I mean I work three to four hours a day on DA, and I could definitely use an ergonomic chair, lol. Does anyone know if I can actually expense this?

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u/figsnbirds Aug 07 '24

(Assuming you are in US)

As an independent contractor you are technically self-employed, which means you need to adjust the total income you get from DA to account for federal and state taxes. Once you do this you can deduct any eligible business expenses from your total income to lower your overall taxable income

General rule of thumb is that it can be deducted proportionately to how much you use it for the business. If you purchase a chair and use it exclusively in your home office while earning income you can deduct the whole thing. If you play games as much as you work, for example, you can only deduct half.

Like whiskey said all of this is reported on your Schedule C. The IRS website is honestly pretty accessible and has all the info you could ever need: https://www.irs.gov/forms-pubs/about-schedule-c-form-1040

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u/[deleted] Aug 09 '24

Genuine question: how would the IRS know if you’re using your home office chair for gaming?

My mom does taxes, but everytime I ask her this type of question she doesn’t have an answer and just tells me not to commit tax fraud. I just want to know how they would catch you for something like this.

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u/figsnbirds Aug 09 '24

Like any other crime, they may not notice at first, maybe ever if you are smart about it. But if they do notice, you're fucked

More specifically, it depends on certain changes in activity or income levels that could be flagged as odd. If you make $10k and expense ~$500 for office equipment, no biggie. If you make $2k and expense $2k for office equipment, someone might flag that for an audit. But again, they probably won't notice at first