Tracy Byrnes: And you have until the date of the extension, right? If you choose to extend your tax return, you still can make that contribution, correct?
Lisa Greene-Lewis: Yes, that is the difference between a SEP IRA and a regular IRA. So self-employed, they have that advantage of being able to contribute that, up until the extension deadline, and also a lot more money that they can contribute and make an impact on their taxes.
Tracy Byrnes: Yeah, 100%. So people should be aware of that. The other thing that self-employed people have is a home office. The problem, of course, with the home office is that the rules are a little murky. My desk is sitting in the middle of my living room, that doesn't count as a home office.
Lisa Greene-Lewis: Right, it has to be a dedicated space for your business. It can't be your kitchen table, where everybody eats. it has to be a dedicated space, but it can be a nice deduction, if you have a dedicated space. It's based on the percentage of use in your home, and you're able to take that percentage times your home expenses, like your mortgage interest, or your rent, property taxes, utilities. So you definitely want to keep that in mind.
Tracy Byrnes: I think the home office is an amazing deduction. But people also should be aware that, if you do work for a business, and they supply an office for you in a building somewhere, you don't get the home office deduction. So just be aware of that. The other thing people forget about too, is gas mileage. If you have to drive somewhere as a self-employed person, you can deduct some money.
Lisa Greene-Lewis: Yes, gas mileage, that is a huge one. And for tax year 2023, is 65.5 cents per mile. Or you can choose to use the actual cost method. And so with that method it's based on your business use. And the percentage of business use is multiplied by your actual expenses, like your lease payments, your repairs for tires, or anything like that.
Tracy Byrnes: So it's worth running it both ways. You brought up a great point about buying equipment. If I'm thinking about doing that, I probably should get on it, right?
Lisa Greene-Lewis: Yes, so if you need any equipment for your business, you might want to consider buying that by the end of the year, because anything directly related to your business. So computer equipment, video equipment, anything like that, you would be able to deduct if it's directly related.
Tracy Byrnes: It seems like there's a lot of different rules for self-employed people, Lisa. What's the best way for them to tackle this?
Lisa Greene-Lewis: So at tax time, you can use our TurboTax Premium. And so with that we search for industry-specific deductions, ones that you think you may not have even imagined that you would get, so that you get all the deductions that you're eligible for. And then you can also fully hand your taxes over to our TurboTax live full service tax experts, and they can do your taxes for you in one meeting.
Tracy Byrnes: Yeah, self-employed people have a whole new set of rules, so they need all the help they can get. Lisa Greene-Lewis TurboTax expert and CPA. Thank you for sharing.
Lisa Greene-Lewis: Thank you for having me.