If you work in security or asset protection or as a correctional officer, payments that you receive for providing security services outside of or in addition to your regular job may be considered income from self employment and are reportable on Schedule C, Profit or Loss from Business. You may deduct all associated expenses to your self-employment income on your Schedule C. Any expenses you have from your W-2 job are not deductible.
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For example, self-employed income would include payments received for providing occasional security at special events, such as sporting events, private parties or events involving visiting dignitaries. For such arrangements, you may account for the income amounts yourself or you may receive a Form 1099-MISC, Miscellaneous Income. If you are self-employed and your net earnings are $400 or more, you must pay self-employment tax on the income you report on Schedule C. In addition, you may need to make estimated payments to cover the amount of self-employment tax or income tax associated with the income you report on Schedule C.
If you are self-employed, you may be able to reduce your taxes by deducting unreimbursed job-related expenses. If based on self-employment income, they may be deducted on Schedule C. You should keep receipts to substantiate these expenses. Examples of some of the items you may be able to deduct include:
- Subscriptions to trade journals related to your work
- Dues for trade associations or unions
- Insurance premiums for protection against liability or wrongful acts
- Specialized equipment or tools that are replaceable within one year
- The cost and upkeep of uniforms if they are required for work and not suitable for everyday wear
- State or local government regulatory fees, licenses, or flat rate occupational taxes, provided these occupational taxes are not paid for initial certification or licensing.
You also may be able to deduct work-related education courses or seminars if they meet certain requirements. Education typically meeting the requirements includes refresher courses, courses on current developments, and vocational courses. However, education that qualifies you for a new trade or business, or that helps you to meet the minimum education requirements of your present trade or business, is not deductible. For example, a security specialist cannot deduct the expenses of going to a police academy to become a state police officer. Additional unreimbursed expenses may be deductible if you are a self-employed security specialist filing Schedule C. Examples of some items you may be able to deduct include:
- Business bad debts
- Car and truck expenses when getting from one workplace to another within the general area where your business is located
- Employee salaries or other forms of compensation such as bonuses or commissions
- Legal and professional fees, such as accounting or legal advice that are directly related to the operation of your business
- Rental expense for business use property such as trailer and equipment rentals
- Travel expenses for traveling away from your business home if you are required to be away from home for longer than an ordinary day's work - examples of deductible travel expenses include transportation by car, air or bus, tolls and parking fees, lodging, and meals
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