Is declaring cash income from my garage soccer training business worth it for tax deductions? (400 sq ft space)

But doesn't using the home office deduction increase your chances of getting audited? I've always heard that's like waving a red flag to the IRS. Also, how would the 400 sq ft garage space be calculated exactly? Is it just a straight percentage of the total home square footage?

The home office audit risk is largely overblown these days. While it was once considered a red flag, the IRS has simplified the deduction process and it's much more common now, especially post-pandemic with more people working from home. For calculating the garage space, you'd determine what percentage of your total home square footage that 400 sq ft represents. For example, if your home is 2,000 sq ft, the garage would be 20% of your total space, so you could deduct 20% of applicable home expenses. You can also use the simplified method where the IRS allows you to deduct $5 per square foot up to 300 square feet, but with your larger space, the regular method would likely be more beneficial.

Does this actually work with Venmo income? My dog walking business is all through Venmo and PayPal, and I'm worried about how to properly document everything since it's not through a formal payment processor.

I'm skeptical about these tax services. How is this any different than just using TurboTax or talking to an accountant? Seems like just another way to pay for something I could figure out myself.

Yes, it absolutely works with Venmo income! The system actually has specific guidance for documenting income from payment apps like Venmo. It gives you templates for record-keeping that satisfy IRS requirements, even without formal invoices. As for how it's different from TurboTax or an accountant, it's more specialized for self-employed people with home-based businesses. TurboTax asks general questions, but taxr.ai specifically analyzes your space usage, business type, and expense patterns. It's like having an accountant who specializes in exactly your type of business situation rather than a generalist. I still use TurboTax for filing, but taxr.ai for figuring out exactly what I can deduct.

Wait, I don't understand. How does this actually work? Does this service just call the IRS for you? Couldn't I just do that myself? What am I missing here?

Yeah right. There's no way you got through to the IRS that quickly. I've tried calling them dozens of times about my home office deduction questions and never get through. Either you got insanely lucky or this is some kind of scam. No service can magically skip the IRS phone queue.

It doesn't just call for you - it uses some kind of system that navigates the IRS phone tree and holds your place in line. When they're about to connect with an agent, you get a call so you don't waste hours listening to hold music. It's basically like having someone wait on hold for you. I was skeptical too! I figured it was either not going to work or would just be a basic auto-dialer. But what happened was they monitored the hold time and call volume patterns, then called at the optimal time using their system. I tried for literally three days straight before this and couldn't get through. With Claimyr I was talking to someone in about 40 minutes.

But how does Venmo know which payments are business vs. just friends paying me back for stuff? I use the same account for both.

Great question. Venmo has been rolling out features to distinguish between personal and business transactions. They now have specific "business" profiles/settings, and the way payments are categorized matters. If people are paying you for goods and services (which they can select when sending money), those will be reported. If it's marked as payments between friends, it's treated differently. However, the IRS doesn't care how Venmo categorizes it - if it's income from services you provide, it's supposed to be reported regardless of how it was processed. The smart approach is to set up a separate Venmo account just for your business transactions to keep everything clean and organized.

I did this calculation for my home art studio which is about 350 sq ft. My income was around $11k last year. After deducting my legitimate business expenses (portion of mortgage interest, utilities, supplies, etc.), my taxable business income dropped to about $6,200. That saved me roughly $1,700 in taxes. The key is keeping good records of ALL your expenses. Things people often forget: portion of internet if you use it for business communication, cell phone percentage used for business, mileage driving to get supplies, software subscriptions, insurance, etc. It was definitely worth it for me.