Here is a page from the IRS website regarding hobby vs for profit business.
https://www.irs.gov/uac/is-your-hobby-a-for-profit-endeavor Rich Sbardella On Tue, Jan 17, 2017 at 8:58 AM, Tony Parkes via Callers < [email protected]> wrote: > Luke Donforth wrote: > > <<I've already had two inquiries, so I should specify, the $8000 was > income paid not counting airplane tickets. It didn't remove mileage > reimbursement, CDSS membership and insurance, etc. > > Net comes to about $5000.>> > > > > Luke, does your “net” figure represent what you have left after **all** > expenses? Have you deducted 54 cents per mile driven (the IRS rate for > 2016), whether or not you were reimbursed? (The alternative is to figure > actual car expenses and deduct the percentage of those that corresponds to > business use of the car, but it’s simpler to take the mileage allowance.) > If you own any sound equipment, whether it’s a mic or a full system, have > you expensed or depreciated each piece? (I’m not an accountant, but our > accountants have always told us it’s OK to expense relatively small > purchases rather than bother with depreciating them.) > > > > The one expense we don’t bother listing is meals on the road. The IRS > allows only 50 percent of those to be written off (rule adopted in response > to the three-martini business lunch); much of the time we get fed by our > hosts; we tend to eat cheaply when we’re paying out of pocket; and we > figure we would have spent that much on food anyway. But all other expenses > get itemized on Schedule C. > > > > In a typical year our net (taxable) figure is less than half our gross. I > agree that it’s a good idea to think about these things as one weighs how > intently to pursue calling or playing for dances. I used to go anywhere for > any amount of money, just for the joy of calling. Somewhere along the line > I realized that I was losing money on many of my gigs, and I got more > careful about pay scale vs. distance traveled. > > > > For many years my rule has been “for love or money” – both is better, but > one or the other is essential. If I suspect it’s going to be a tough gig > (e.g. an open bar or a “family” dance where the parents won’t join in), I > quote high enough that I won’t kick myself later. Conversely, I’ll go out > for short money if it’s a chance to work with some treasured > friends/colleagues, or if it’s a new series that wants help getting off the > ground, or if I get to call lots of Merry-Go-Round-type squares <evil grin>. > > > > Not specifically addressed to Luke: There’s a common belief that if the > IRS decides your calling or playing is a hobby, you’re not allowed to > deduct any expenses. On this subject, the IRS says only that losses can’t > exceed gross income, so presumably you can deduct expenses down to the > break-even point. Note that if you’ve made a profit in three of the last > five years including the most recent year, the IRS assumes it’s a > legitimate business. > > > > Tony Parkes > > Billerica, Mass. > > > > *From:* Callers [mailto:[email protected]] *On > Behalf Of *Luke Donforth via Callers > *Sent:* Tuesday, January 17, 2017 7:56 AM > *To:* [email protected] > *Subject:* Re: [Callers] Totals for taxes > > > > I've already had two inquires, so I should specify, the $8000 was income > paid not counting airplane tickets. It didn't remove mileage reimbursement, > CDSS membership and insurance, etc. > > Net comes to about $5000. > > > > _______________________________________________ > Callers mailing list > [email protected] > http://lists.sharedweight.net/listinfo.cgi/callers-sharedweight.net > >
