Using Expenses as a Tax Shield

Oreos

wasvsdalIf you work for a firm and get caught, it would mean you'd get fired. If you claim it on your Schedule C, and get audited then you'd be in a hole after you get penalized up your ass. But yes, that is one of many ways to commit an illegal crime. It doesn't take a genius to commit a crime - just a lot of guts and a lack of ambitions.

I'm British so have no idea what a Sched. C is but just humour me, why would your firm care? It's a pass through for them; admittedly it doesn't look great on their part. The tax loss is to the public purse. So, rightly, HMRC or IRS, would be pissed, and would, when/if they cottoned on, want "their" money. And I suppose, if convicted of a "crime," your firm would have grounds for dismissal.

It would only get deducted from your paycheck if you expensed it through the firm, in which case the firm is paying for it.

Edmundo Braverman

TNAIn the USA you could swing it, but you'd need to be an independent contractor (as mentioned above) or have a consulting business where you essentially were the business. That way you could basically expense your day to day living, within reason.

This is absolutely true, but only to the extent that your accountant isn't a Boy Scout. Unfortunately mine is. I did something similar to what the OP is suggesting when I set up my yacht services company, and my accountant called bullshit on much of it before the IRS even got to see it.

Moral? If you're going to try it, use a shady accountant or do your own taxes.

Tax accountants aren't shady, they are cash optimization professionals.

Edmundo Braverman

TNAIn the USA you could swing it, but you'd need to be an independent contractor (as mentioned above) or have a consulting business where you essentially were the business. That way you could basically expense your day to day living, within reason.

This is absolutely true, but only to the extent that your accountant isn't a Boy Scout. Unfortunately mine is. I did something similar to what the OP is suggesting when I set up my yacht services company, and my accountant called bullshit on much of it before the IRS even got to see it.

Moral? If you're going to try it, use a shady accountant or do your own taxes.

Yeah I mean certain accountants are probably risk adverse to the point it hurts you.

Better to ask forgiveness than permission.

Oreos

ViktriThere wouldn't be an impact on your taxes because your income is not necessarily the same as your take home pay.

Example: Expense of 10 Taxed at 100 income Your paycheck was 90 You are taxed at 100, not the 90

Okay. But then why do I have to ring up HMRC to ask for a rebate when my bonus comes and they raise my tax rate? It's not my salary, but still has a bearing on my tax rate.

God, I'm diving a little deep into this....starting to convince myself to have a go.

I'm not sure what you are exactly describing but my guess is that you mean that your bonus is overtaxed and you receive a rebate?

Bonus and salary are active income and taxed aggregately.