Hypothetically: Starting a home woodworking business with the intent to write off tool/material purchases as businesses expenses, even though I'll be building things mostly for me and I'm not trying to turn a profit...

Just become an LLC, a contractor, buy the tools and deduct(you can also buy certain weight rating vehicles like Land Rover 6000-7000ibs car and deduct that even), as long as you have beyond reasonable doubt you should be ok, but everything you buy has to be used by and for that contracting business, you can still use them personally as well. This includes computers/electronics and office supplies, office supplies can include food as well, it’s best when buying to use a single company card so everything is easy to go through easily with an accountant to find what is deductible and what is not.

Also, it is not cost efficient to work as a contractor, the taxes are astronomical. If you made 80k$ annually you’d only make 50-60k$ state and local gov takes at least 20k$ between them. At least that’s what my buddy says, he has a tax guy.

This same person said one of their bosses decade ago was a gambler, lost everything and had to move into the business, he survived by buying everything “for the break room”. There was also another boss at different job, the woman would buy things like for “office party” even wine and such, and was open to all the employees not just her, so it was deemed a business expense I imagine, he also said this job he should have stayed at cuz it was by far the best one he ever had.

/r/business Thread