From: tcmay@got.net (Timothy C. May)
Date: Wed, 21 Aug 1996 06:22:34 +0800
To: cypherpunks@toad.com
Subject: Re: Taxes on Internet access prediction
Message-ID: <ae3f4d89020210046ca3@[205.199.118.202]>
MIME-Version: 1.0
Content-Type: text/plain


At 5:54 PM 8/20/96, Mike McNally wrote:

>Sure, but clearly that's not exclusively the case.  (Amazingly enough
>to some might be the fact that my for-work e-mail volume far exceeds
>my not-for-work volume.)  Hopefully I haven't brought too much shame
>to my employer.
>
>In any case, with the IRS it's often less a matter of common sense
>than what they happen to decide is The Law.  Witness the changes in
>laws about what constitutes a "home office".  Currently, if you're
>(let's say) a freelance plumber who maintains a legitimate office
...

Caveat: I'm not a defender of income taxes, of course. Nor am I a defender
of the IRS.

However, on the "home office" situation, most of the examples I encounter,
in talking to friends, are clearly scams to save a thousand bucks (or less)
on their tax returns. Most of my friends who try to deduct a room in their
house because they've put their computer there are clearly not using "20%"
or "25%" or whatever of their house as a business.

For those who really do actually use a room in their home for building
things, for meeting with clients, for operating a home business of some
sort, then I think the IRS will have no problems allowing it. (If the
subject even comes up, in an audit. There are some reports that attempting
to declare a home office increases ones chances of being audited....)

As the saying goes, consult a competent expert. A few books detail the
expected amount of work that must be done in a "home office," and whether
one is likely to qualify.

As one data point, I have derived nearly all of my income over the past 10
years from investments. And yet the "work" needed to be done on my computer
is such a tiny fraction of my overall use of it that I don't even try to
write off my various computers as "investment expenses." Your mileage may
vary.

And I certainly have not tried to write off a room in my house as a home
office. (As it happens, I need few of the "office" resources, so I have my
PowerMac and 17" monitor sitting beside my recliner in the family room of
my house, where I can lie back, log in, and bliss out in cyberspace.)

--Tim May

Boycott "Big Brother Inside" software!
We got computers, we're tapping phone lines, we know that that ain't allowed.
---------:---------:---------:---------:---------:---------:---------:----
Timothy C. May              | Crypto Anarchy: encryption, digital money,
tcmay@got.net  408-728-0152 | anonymous networks, digital pseudonyms, zero
W.A.S.T.E.: Corralitos, CA  | knowledge, reputations, information markets,
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