John Jensen on thu 16 mar 06
Mel and some others have mentioned the words tax deduction with regard
to NCECA. I wonder if our resident tax authoritie (Bonnie) or some
others might shed some light on the circumstances under which one
might deduct one's NCECA expenses or some part of them.
John Jensen, Mudbug Pottery
John Jensen@mudbugpottery.com
http://www.toadhouse.com http://www.mudbugpottery.com
http://www.mudbugblues.com
Steve Slatin on fri 17 mar 06
John --
DISCLAIMER --
I'm a long step below Bonnie in knowledge on
these things, but basically the IRS does allow
professionals to deduct their professional
conference expenses. Like many of these things,
keeping records and operating like a professional
make it easier for the IRS to accept.
See IRS Publication 463, from which the following
is extracted --
-----------------------------------------------
Conventions
You can deduct your travel expenses when you
attend a convention if you can show that your
attendance benefits your trade or business. You
cannot deduct the travel expenses for your
family.
If the convention is for investment, political,
social, or other purposes unrelated to your trade
or business, you cannot deduct the expenses.
Your appointment or election as a delegate does
not, in itself, determine whether you can deduct
travel expenses. You can deduct your travel
expenses only if your attendance is connected to
your own trade or business.
Convention agenda. The convention agenda or
program generally shows the purpose of the
convention. You can show your attendance at the
convention benefits your trade or business by
comparing the agenda with the official duties and
responsibilities of your position. The agenda
does not have to deal specifically with your
official duties and responsibilities; it will be
enough if the agenda is so related to your
position that it shows your attendance was for
business purposes.
------------------------------------------------
--- John Jensen wrote:
> Mel and some others have mentioned the words
> tax deduction with regard
> to NCECA. I wonder if our resident tax
> authoritie (Bonnie) or some
> others might shed some light on the
> circumstances under which one
> might deduct one's NCECA expenses or some part
> of them.
>
> John Jensen, Mudbug Pottery
Steve Slatin --
In the mornin’ cry of the rooster
The baby lay alone
And the old cow in the green grass
Shed white tears in the red hot sun
__________________________________________________
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Jeremy/Bonnie Hellman on fri 17 mar 06
Actually Steve is extremely knowledgeable about
tax matters, so pay attention to what he says!
What he has written is true.
My approach is whether or not your attending
NCECA would qualify to an outside observer as
an "ordinary and necessary" business expense.
Business expense means that 1) you operate a
business, and 2) that your main purpose in
attending NCECA is related to that business.
Just because you spend a little time in an activity
related to business does not allow you to deduct
all of your expenses.
If I were operating a business, I would be sure to
keep my program, or download the program, and
document what I'd attended. If I took photos (for
ideas, inspiration, etc.) I'd keep a copy of the disk
with my tax information. I might even have some
printed to save. I would also keep a diary of what
I did, and how it relates to my business.
Those of you who attended my short talk on Into
to US Taxes for Ceramic Artists in the clayart room
would want to be sure you note this, as it would
be an excellent example of the business purpose
of attending NCECA.
If you spent a significant amount of daytime doing
non-business related activities, then your expense
is likely to be disallowed, even if you registered for
the full NCECA experience. If you used the trip to
Portland as an opportunity to spend a significant
amount of time doing non-business related
activities, the expense is likely to be disallowed.
I believe that if you bring a spouse or friend who
is not involved in your business, you not only can't
deduct that person's expenses, but you run a risk
that YOUR activities will look less "ordinary and
necessary" and more like unrelated fun. Now
if that spouse or friend is involved in clay, their
own business or involved in your business, it's a
different story.
The biggest difference between a business and
a hobby is whether you operate with a profit motive,
and are TRYING to make a profit. Do you look like
you are trying to make money? To an outside
observer, you'll want to be sure that NCECA is
part of the whole picture.
Now, the ultimate test of whether you operate with
a profit motive is whether you actually DO turn a
profit in your business. You're much less likely to
be challenged if your bottom line is positive.
This doesn't mean that your expenses won't be
challenged in an audit, but it does mean that you
are less likely to be audited on the merits of your
Schedule C.
Pub 463, available at www.irs.org is worthwhile
reading, if you're doing your own taxes.
Bonnie
Bonnie Hellman, CPA in PA & CO
Circular 230 Disclaimer - IRS regulations require
me to say that this communication is not intended
or written to be used, and cannot be used, by you
as the taxpayer, for the purpose of avoiding
penalties that the IRS might impose on you.
----- Original Message -----
From: "Steve Slatin"
To:
Sent: Friday, March 17, 2006 11:42 AM
Subject: Re: Deducting NCECA/Taxes
> John --
>
> DISCLAIMER --
> I'm a long step below Bonnie in knowledge on
> these things, but basically the IRS does allow
> professionals to deduct their professional
> conference expenses. Like many of these things,
> keeping records and operating like a professional
> make it easier for the IRS to accept.
>
> See IRS Publication 463, from which the following
> is extracted --
>
> -----------------------------------------------
>
> Conventions
> You can deduct your travel expenses when you
> attend a convention if you can show that your
> attendance benefits your trade or business. You
> cannot deduct the travel expenses for your
> family.
>
> If the convention is for investment, political,
> social, or other purposes unrelated to your trade
> or business, you cannot deduct the expenses.
>
> Your appointment or election as a delegate does
> not, in itself, determine whether you can deduct
> travel expenses. You can deduct your travel
> expenses only if your attendance is connected to
> your own trade or business.
>
> Convention agenda. The convention agenda or
> program generally shows the purpose of the
> convention. You can show your attendance at the
> convention benefits your trade or business by
> comparing the agenda with the official duties and
> responsibilities of your position. The agenda
> does not have to deal specifically with your
> official duties and responsibilities; it will be
> enough if the agenda is so related to your
> position that it shows your attendance was for
> business purposes.
>
> ------------------------------------------------
>
>
>
> --- John Jensen wrote:
>
>> Mel and some others have mentioned the words
>> tax deduction with regard
>> to NCECA. I wonder if our resident tax
>> authoritie (Bonnie) or some
>> others might shed some light on the
>> circumstances under which one
>> might deduct one's NCECA expenses or some part
>> of them.
>>
>> John Jensen, Mudbug Pottery
>
> Steve Slatin --
>
> In the mornin' cry of the rooster
> The baby lay alone
> And the old cow in the green grass
> Shed white tears in the red hot sun
>
> __________________________________________________
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