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The Magic Cafe Forum Index » » Tricky business » » Do you pay your taxes on all gigs? Tips? (0 Likes) Printer Friendly Version

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Bill Nuvo
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Paying royalties is another set of laws...not a tax thing...although you can claim it as an expense on your taxes Smile

As Curtis mentioned earlier...there is so much you can claim in your taxes so you don't end up paying. Of course every country/area is different on exactly what, and that also can change from year to year (see you local tax accountant for details).

Some of the things I can claim...cable, internet, cds, dvd, theatre shows (both cinema and stage productions), some clothing, speeding tickets (although I don't speed, but I could claim it if I had to), some meals, portion of my home, phone, car/insurance, car maintenance and repairs, office items (anything from paper to computer), and so much more including royalty monies paid out.
JordanB
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On US Federal Income Tax, I would not suggest deducting speeding tickets or any type of fine or penalty imposed by a governmental entity.
Bill Nuvo
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It depends Jordan if you are allowed to or not. Speeding tickets I can claim, but parking tickets no. Reasoning: You are contracted to be at a place at a specific time, so you can claim the cost of the speeding ticket as part of doing the business, however, once you get there, you must park properly. Again, consult your tax accountant to find out what you can and cannot claim.
Dannydoyle
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OH that one would be fun to try to explain during an audit. By that reasoning you had to park where you did because you were going to be late if you parked any further. How is that any different?

I mean if you have to park properly shouldn't you have to drive properly? What reasoning is that? I really would need to see the tax code which allows the government to pay for your speeding tickets.

I remain skeptical.
Danny Doyle
<BR>Semper Occultus
<BR>In a time of universal deceit, telling the truth is a revolutionary act....George Orwell
Bill Nuvo
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That's the government's reasoning..not mine. I too think it's odd, but it was in there last year (Canada).

And the government is not paying for your ticket...you pay, but it's an allowable expense to claim. Again though, I don't know how it got in there, but it was. Things might have changed since then. Will find out next time I do my taxes.

Posted: Nov 18, 2009 9:38pm
IRS Tax Deduction You Can’t Take
Expenses incurred as a result of fines or criminal penalties, even those incurred through your regular course of business. It makes sense, but every year people try to deduct things such as the speeding ticket they received while driving the company van. Some think it is allowed under Section 162 of the Internal Revenue Code, but some would be mistaken. The IRS doesn’t like such claims, so it’s better not to make them in the first place. For that matter, deducting any expenses incurred during the commission or as a result of, an illegal act are forbidden.

I guess that settles that for the U.S.

I'll assume that Canada might have something similar, but still don't understand how my tax guy showed that to me last year. Maybe it's time for a new tax guy lol
Dannydoyle
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I didn't want to nit pick Bill, but that was what I was talking about LOL.

It would be like deducting baggies for your drug business.
Danny Doyle
<BR>Semper Occultus
<BR>In a time of universal deceit, telling the truth is a revolutionary act....George Orwell
Bill Nuvo
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Oh no prob Danny...It just goes to show, one needs to personally keep on top of things...

I thank you for calling me on it and pressing the issue.
Kevinr
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Another spid on this since we are getting so much good activity!

Would you tell a new part time magician (First year in business)who does only 2 gigs a month or 5k a year this same thing?
Dannydoyle
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Why wouldn't I?

Heck trust me when I tell you that bad habits are darn hard to break. Best not to get into them in the first place. May as well learn to do the right thing early, instead of the way I did it.
Danny Doyle
<BR>Semper Occultus
<BR>In a time of universal deceit, telling the truth is a revolutionary act....George Orwell
RobertSmith
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You can bet with Obama's out of control spending, the IRS is going to be coming for everyone.

No longer can you live by the phrase, "They have bigger fish to fry."

Yes, they do.

But the small fish will be getting tossed in the pan soon enough.
JordanB
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Ironically, although you can't take a deduction for fines or penalties imposed by a government.... you CAN take a deduction for ordinary and necessary business expenses used in an illegal business....unless it is in the illegal drug trade or a bribe to a government official.
Kevinr
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In Colorado medical pot is legal!

They working on a bill to tax here right now... Strange..
Dannydoyle
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I don't want to derail this, so just let me say "YES" I would tell everyone to do the right thing.
Danny Doyle
<BR>Semper Occultus
<BR>In a time of universal deceit, telling the truth is a revolutionary act....George Orwell
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