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Questions about US taxes
Thread poster: Kim Metzger

Kim Metzger  Identity Verified
Mexico
Local time: 20:33
German to English
May 21, 2002

As a US citizen living in Mexico, I don\'t have to file my US tax return until June and am just now getting around to it. I don\'t have to pay income tax because I stayed just a little under the $78,000 tax-free allowance for US citizens living abroad. If there\'s anyone out there with experience filing the Profit and Loss from Business form (Schedule C) maybe you can help me with a few questions. Can I deduct the following as business expenses? 1. $1,000 for new dictionaries (Other expenses). 2. ProZ membership (advertising). 3. ATA membership and exam (taxes and licenses). 4. Telephone costs.

Any help will be much appreciated.


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Sara Freitas
France
Local time: 03:33
French to English
check with the US embassy May 21, 2002

Some US Embassies offer tax assistance or can at least send you one of the many booklets you need to fill out the forms properly. I tried with no luck to get help while in Turkey but the embassy there didn\'t offer any tax services, but now in France, I know the Embassy here does. Maybe the one in Mexico does too! Good luck!! I advise you to avoid the IRS website and hotlines as they are not very user friendly. I actually ended up on the phone with an agent in Guam when I called from Turkey!!!

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jccantrell  Identity Verified
United States
Local time: 18:33
Member (2005)
German to English
+ ...
yes, yes, yes May 21, 2002

Disclaimer: I am NOT a tax professional, nor do I play one on TV.



That being said, let me tell you how it goes for me here IN the USA, Kim.



I have a separate line for the business phone, so it it easy to deduct those expenses. Even if you only have one line, just total up the business use and you can deduct it. (Office expenses?--I forget the actual heading)



The books and dues appear on my return under the \'Other\' section and are listed as \'Dues and publications\'. The same applies to my ISP, my Compuserve account and Proz. That is, under \'Other\' but with the explanation of \'Computer services.\' This is where you can put a lot of items, e.g., postage, utilities if you use a home office.



It appears to me that you can deduct virtually any business expense (not food, though--at least not 100%) from your net. You just need to see where it fits on the schedule C. And if they do not have a specific category for it, you can do what I do, e.g., \'Dues and publications.\'



I will admit, the USA Embassy was virtually worthless when I lived in Germany. I was left to my own devices as this was pre-internet days. Now, though, I would do a search on Google for the IRS site and see what publications you might download. They do appear to provide much more help these days.



What, a kinder, gentler IRS? What is the world coming to?



Good luck.


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Kim Metzger  Identity Verified
Mexico
Local time: 20:33
German to English
TOPIC STARTER
Thank you May 21, 2002

Thanks Sara and jc. I just needed some reassurance that I wouldn\'t be doing something terribly wrong. Actually the IRS does seem to have improved its approach to dealing with taxpayers and the online forms and info are very useful. Just one more thing: I bought almost 20 dictionaries last year. Would you lump them together with one cost or would I have to list each one separately?

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jccantrell  Identity Verified
United States
Local time: 18:33
Member (2005)
German to English
+ ...
all in one May 21, 2002

When I buy books, the IRS only sees the total cost to me, including taxes, shipping, etc. for ALL the books in one lump sum.



If they knock on my door for an audit, I have ALL the documentation ready.



I have offset several thousand dollars in one year on dictionaries, usually when I have enough profit to still come out in the black, although I have also run in the red some years.


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