need simple financial advise

okay, im 18 and dont have a job at the moment and dont anticipate on having on atleast until june 10th, over the NC blizzard ive earned some extra money doing recovery jobs, if i file the cash i make as income, and spend it all on fire fighting equipment (i need to buy a mask because my dept only has 2 masks that fit me, on seperate trucks and there is 2 other people with the same size) will i get it back in a tax return if i file the purchase on my taxes?


or should i pocket the cash and move on?


btw i dont feel bad because i only charge people that were being stupid....one of them was a jeep that slid into a canal that had tacoma puller as a side decal...they had been out there 5 hours previously trying to get it out with jeeps and a Z71

 

You can file it as a deduction on your tax return, so it will be a reduction of your taxable income.

 

so id get the $$$ back after i file it as a deduction?

 

I doubt you'll make any back if you file it as income. Many factors come into play as in how much you pay into tax, your listed w-4 deductions, and income wise. I'd say pocket it. But you didn't say how much you made during the season so hard to tell. Are you single, married, kids? Maybe someone else can chime in.

 

Are you a volunteer? Just curious, because if you just buy something for work because you want it, it is not necessarily a qualifying business expense. Now if this is something that was required by your employer for you to get, then you would be able to write it off. The tricky part is with your job being paid by city/county/state tax money, I'm not sure how this would affect any write offs you may have.

 

And to clarify, I know you need a mask for what you do, but if there is one that is provided but you want a different one on your own dime it can't be claimed. For instance, my office provides me with a computer, but if I want a better faster computer and just go out and buy it, it does not qualify as a business expense.

On the other hand, you are only 18, chances are you are not getting audited.

 

As far as the money goes, how much are you talking (you don't have to tell me), but unless you made a substantial amount, then you don't have to claim it, even if you are then going to buy a mask that you will write off.

 

It's a deduction, which reduces your taxable income. So for example if my taxable income is $20k and I also file $10k in deductions (say for equipment bought for my business), it reduces my taxable income to $10k ... meaning I only pay taxes on that remaining $10k.

That being said, did you have any regular work in 2010? Will you be receiving any W-2's or 1099's from employers? Because these also get filed with the IRS, and you don't want to mess with that.

But say you pull me out of a ditch, and I slip you $200 .. though you're technically supposed to file that as income with the IRS, it's kind of like a tip ... no official record means they don't know it exists. So if we're talking small amounts should you report it? Well that's between you and your conscience.

PS ... I am not an accountant or attorney. None of this is meant to be taken as legal advice. It's just one guy's experience and opinion.

 

its around 300 bucks and i am a volunteer, hopefully though i will get hired after this semester. its something that would be nessescary to have because of my departments lack of small sized masks because i cannot get a good air seal on the large ones (why we dont have medium idk). but no income for 2010 on my taxes.

so if i filed it as a tax write off, assuming i didnt earn anymore than the 300, it wouldnt be given back to me but it would be taken off the listed income i filed on taxes?

 

You won't be filing a tax return if you didn't have any income then.

And saying you did have income and were claiming that deduction, it's not like they're going to send you 300 back. Like MountainEarth and I explained, it would only be used to reduce your taxable income.

I am an accountant myself, however I'm not in public accounting so I don't really work with income taxes, so take what I say with a grain of salt haha.

 

You only made 300 dollars all year??

This is not officially sanctioned nor legally binding- but unless you make more than $9,350 as a single taxpayer...you don't even need to file a return.

 

I interpreted it as that's how much the mask is. I don't think he made anything, at least not officially as in any employer will be giving him a W2.

 

I think I get it now.
300 dollars or not-You might have a hard time explaining that as a "business expense."

And what I posted before ($9350) still holds.

 

nope just $$$ doing odd jobs this year. and next year just odd jobs unless i get employed

 

Odd jobs probably wont earn you enough to require you to file taxes from the sounds of it.

cash? keep it. In small amounts it's no harm done...If you make $1000's or tens of $1000's in cash, then report it, imo.