QUESTION:
I was an unemployed graphic designer, but now I'm working as a freelancer from home. What expenses can I deduct?
ANSWER:
Transitioning from unemployed to self-employed changes the way you file taxes. There are many deductions that could apply to your situation, from home office space, supplies and equipment to retirement contributions and health insurance premiums. It is important to consult a tax specialist and track expenses early on so that you do not overlook any deductions to which you are entitled. You can also refer to the IRS website for tips on how to deduct your small business expenses:
https://www.irs.gov/businesses/small-businesses-self-employed/deducting-business-expenses
QUESTION:
I live in a condo and my homeowners association (HOA) is imposing a special assessment on residents to fund new roofs. Can I deduct the assessment on my 2020 taxes?
ANSWER:
No. If it is your residence, like any other homeowner, repairs are not tax-deductible. However, you can use the assessment as a deduction if you rent out all or part of the property as a landlord, although rentals come with a whole set of different rules. Home improvements that substantially enhance the value or usefulness of the property are deductible, however.