Reeling in the Savings: Tax Deductions for Fishing

Reeling in tax deductions for a fishing business is much easier than reeling in a big catch.

Reeling in tax deductions for a fishing business is much easier than reeling in a big catch.

It’s National Fishing Week! Fishing is a hobby many amateur anglers enjoy in their free time. But it’s also a big industry. Many entrepreneurs out there run fishing charters, give fishing tours and lessons, and are active on the water in a variety of capacities.

The IRS generally allows self-employed individuals in the fishing trade or those who own a fishing-based business to reel in some savings by claiming the following ordinary and necessary fishing expenses as tax deductions when using Schedule C of Form 1040:

Property

  • You can depreciate the cost of your fishing boat for a trade or business using the 7-year property depreciation approach. You can depreciate traps, nets, pots, and other such items using this model as well, unless you determine that you will only be using them for less than one year. In this case, you can claim their initial cost as a deduction.
  • For any repairs or improvements to property like fishing boats that increase their value, make them more useful, and lengthen their life, you must depreciate the money you spend to make these modifications. Otherwise, you can claim these expenses as a write-off.

 

Transportation Expenses

  • You can typically write off the fuel you buy for your fishing boat. (NOTE: You may be eligible to claim a fuel tax credit as well.) Consider maintaining a mileage log with data on the distances you travel on your boat for business purposes.
  • You can only deduct transportation if it is for business purposes. For instance, if you report to an office complex where you house the administrative side of your business and then drive to a dock where your charter is housed, you can write off this trip behind the wheel using mileage or actual expenses.

Fishing Tools & Equipment

  • Fishing reels, tackle boxes, storage bins, coolers, life jackets, GPS systems and other common tools and supplies needed for fishing trips are considered deductible business expenses.

Meals & Entertainment Expenses

  • Meals are deductible for fishing professionals if you’re away from your ordinary “tax home” doing business and your trips are overnight or long enough to require a time of rest for you to perform your trade. Fishermen often spend many hours using their reels throughout a workweek, making it common for them to need to reenergize with food they bring on their boats. That’s why this deduction can be a nice perk to save on taxes.
  • If you conduct business activities during a meal or entertainment event, you can write off 50% of these expenses.

Marketing Expenses

  • Any expenses you incur to spread the word about your fishing business are deductible, including business cards, a website and web hosting, social media marketing, etc.

Home Office Expenses

  • If you operate your fishing business out of your home office when you’re not on the water, you can deduct a portion of your residence via the home office deduction. This may include phone and Internet access, electricity, and other expenses. Take a percentage of your home bills based on how much is spent on business activities, and then you can write off this amount on your tax return. You may also use the flat-rate home office deduction method by claiming $5 per square foot of home office space for up to 300 square feet with a maximum deduction of $1,500.

Get more tax deductions for fishing and ways to save money through IRS business deductions by working with the accounting pros at 1-800Accountant. Call 1-800-222-6868 or visit www.1800accountant.com.

Image credit: The image included in this blog post is used with permission via the Flickr Creative Commons license.

Hackers Strike IRS, Access 100,000 Taxpayers’ Information

Identity theft and tax scams have become a serious issue for innocent American taxpayers in recent years. A new hack that hit the IRS proves this point more than ever.

On Tuesday, May 26, the federal tax collection agency reported that online hackers targeted an IRS service in order to gain access to personal information for over 100,000 taxpayers.

The identity thieves hacked an online service called “Get Transcript,” a system that allows taxpayers to request tax documents and information for filing and recordkeeping purposes. They bypassed a security questionnaire that asked for a taxpayer’s date of birth, street address, tax-filing status, Social Security Number, and other personal information. The IRS became aware of the hack due to an unusually large number of taxpayers that were seemingly requesting transcripts from February through mid-May of this year.

“We’re confident that these are not amateurs, that these actually are organized crime syndicates,” said IRS Commissioner John Koskinen in a press conference.

According to the agency, it has launched a full criminal investigation into the breach and said its main computer system remains operational and secure.

“In all, about 200,000 attempts were made from questionable e-mail domains, with more than 100,000 of those attempts successfully clearing authentication hurdles,” the agency said in a statement.

The IRS is certain that tax refunds were stolen through the hack. It is currently investigating exactly how many fraudulent refunds were stolen. Koskinen estimates that under $50 million in tax refund money has been claimed by the fraudsters. He added that the agency will notify all taxpayers whose information was accessed by the hackers.

“This tax scheme is simply one more piece of the much larger puzzle of more and more tax scams rearing their ugly heads every year,” said Bert Seither, Vice President at 1-800Accountant. “We are dedicated to helping everyone with their tax and accounting needs, but we feel especially obligated to assist those who have become innocent victims of tax fraud.”

If you are one of the affected individuals whose personal information was compromised through this hack, 1-800Accountant is here to help you navigate through this situation. We will offer you a free one-on-one tax consultation to ensure your taxes are in order – and to make sure you receive your tax refund for 2015 and beyond. To claim this offer, call 1-800-222-6868 today. Visit www.1800accountant.com. To learn more about our services.

Speeding to Savings: Tax Tips for Race Car Drivers

It can be very expensive to win a checkered flag. But using these tax tips for race car drivers will help you keep more of your hard-earned money.

It can be very expensive to win a checkered flag. But using these tax tips for race car drivers will help you keep more of your hard-earned money.

Auto racing is an incredibly popular sport. From NASCAR to the IndyCar Series, fans across America attend and tune into auto racing events all the time. Plus, many individuals are involved in the amateur racing circuit in their free time.

With the Indianapolis 500 this weekend, check out these tax tips for race car drivers – no matter if you race for fun or drive as a full-time profession:

Determine if racing is your hobby or your business.

If you race on a track as more of a hobby than a formal business, you’ll likely be strapped to claim many tax breaks on auto racing expenses when filing taxes with the IRS. You cannot claim losses on Form 1040 designed to offset other income you earn. In addition, any deductions you claim on expenses cannot exceed any prize winnings you earn through this activity. If you report consistent financial losses as a race car driver, the IRS will probably assume that you are not partaking in this activity to make money. Therefore, you won’t be viewed as a for-profit business. On the flipside, you can show Uncle Sam that you are indeed operating as a business by having a business plan on paper and by showing your financial statements. In essence, you must provide ample evidence that you participate in auto racing on a full-time basis to qualify for business-related tax breaks.

Claim applicable tax deductions for race car drivers.

If you are taking home checkered flags and paychecks for your prowess behind the wheel of a race car, you are eligible to write off your auto racing expenses as a tax deduction.

Tax deductions for race car drivers may include:

  • Depreciation on a race car, computer for tracking speed, race track, etc.
  • Fuel
  • Car supplies, i.e. tires, replacement parts, etc.
  • Other supplies, i.e. pens, paper, notebooks, etc.
  • Transportation to racing events and promotional appearances (either mileage or actual expenses)
  • Meals, lodging, and entertainment related to racing events
  • Casualty losses from a crash in a race
  • Merchandise you sell to promote your brand, i.e. t-shirts, bumper stickers, hats, flags, etc.
  • Marketing expenses
  • Professional fees for accountants, attorneys, racing consultants, etc.

Document all of your expenses – and save receipts.

As a race car driver, you’ll likely be on the hook for numerous expenses since the field of racing is certainly no cheap endeavor. So make an effort to carefully document all of your expenses. Save receipts, and consider scanning them onto your computer for convenience when you need to access them in the future. Use a mileage log to track your transportation expenses. It’s especially important to document all of this financial information if you’re trying to show the IRS that your racing activities are a business rather than a hobby.

Consider establishing a formal business entity.

If you’ve pursued racing as a hobby, but you’re now focusing on it as your primary profession, it’s wise to consider creating an LLC or corporation for your trade. Establishing a legal business entity can increase your credibility as a reputable race car driver. In terms of IRS taxes, it can help you reduce your tax liability through tax strategies available to formal business owners rather than those who work as sole proprietors. From tax deductions to tax credits, you’ll be glad you decided to add “LLC” or “Inc.” to your business card.

To learn about more tax tips for race car drivers and those in any profession, turn to the accountants at 1-800Accountant. Call 1-800-222-6868 or click over to www.1800accountant.com.

Image credit: The image included in this blog post is used with permission via the Flickr Creative Commons license.

It’s Time for Spring Cleaning…of Your Finances

dollar signsMost people think spring cleaning is all about getting your house clean, tidy, and in order during the springtime when the weather is starting to feel a little more comfortable outside. However, you certainly shouldn’t overlook your finances.

Check out these spring cleaning tips for your finances:

– Update your budget.

If you don’t have a personal budget that you use to make sure you’re spending money wisely, it is time to create one. If you have one, it’s time to update it. Make a list – or spreadsheet – of all regular expenses you have. Then make a note of any money you spend on dinners, movies, new clothes, or other things that aren’t exactly necessary. Determine if you can cut out any of these costs. Or, you might be able to spend money on less expensive goods and services that are just as beneficial as their pricey counterparts. It’s all about examining the reality of your finances and seeing how you can improve on them.

– Organize your paper files – and shred unnecessary records.

Take some time this spring to organize your paper documents. These could be receipts, invoices, tax returns, bank statements, and any other relevant documents you’ve been saving. Put them in appropriate file folders for easy access. Shred any paperwork you no longer need as well. It’s tough to part ways with certain documents. But if you know for sure that you don’t need to keep something, get rid of it.

– Digitize financial records.

A great way to maintain records without letting them pile up in the corner of your home office is to digitize important records. Scan them into your computer. You could even use a backup solution or cloud service to make them accessible anywhere on your smartphone or tablet. Just remember to keep them organized on your computer so you can find them easily when you need them.

– Review and consolidate bank or retirement accounts.

Some people will set up multiple bank accounts and even retirement accounts like IRAs. In certain situations, this may be necessary. But if you have several accounts with varying amounts tucked away in them, why not consolidate them all into one or two accounts? It’ll make your life a lot easier, and it’ll reduce your paperwork. Plus, having just a single account will mean only one password to remember for online access. In addition, consider looking into accounts that will make you more money over time via interest.

– Review your tax situation and look for new tax-saving opportunities.

Taxes play a big role in how much money we keep and, unfortunately, how much we must fork out to Uncle Sam each year. But if you have a good handle on your taxes, you can reduce your tax bill. Explore new potential tax deductions or tax credits. Consider any recent life changes that may qualify you for such tax-saving measures. You could save thousands of dollars through completely legitimate tax breaks. It’s all about understanding and navigating the complex federal tax code, which is much easier to do with the help of an accountant.

For more finance and tax tips on how to stay organized and keep as much of your money as you can, turn to the accounting professionals at 1-800Accountant today. Call 1-800-222-6868 or check out www.1800accountant.com.

Image credit: The image included in this blog post is used with permission via the Flickr Creative Commons license.

1-800Accountant Collaborates with Sam’s Club to Offer Innovative Mobile Accounting Services

1-800Accountant, the nation’s leading tax and accounting firm specializing in small-business, has formed a collaboration with Sam’s Club, a leading membership warehouse club. This joint effort is designed to offer a full array of innovative accounting services to Sam’s Club members that are accessible from a mobile device. Now available at SamsClub.com/services, 1-800Accountant provides member-exclusive savings on business accounting and tax services for a low monthly fee.

A growing number of small-business owners are managing many aspects of their businesses right from their phones and other mobile devices. 1-800Accountant is providing them innovative mobile applications to simplify their tax and accounting needs with accessibility on any device. Services include tax preparation, tax consulting, bookkeeping, and audit support. 1-800Accountant is at the forefront of this mobile revolution. All accounting services come with a dedicated accountant who can be contacted with the simple push of a button, ensuring that members’ important questions always get an answer in a timely manner.

In addition, small-business owners no longer need to fret about keeping receipts that continually pile up. Instead, they can simply take a picture of the receipt with their phone, and the information is automatically uploaded to 1-800Accountant’s secure, web-based bookkeeping portal. Sam’s Club members will never have to drive across-town to their accountant’s office again to deliver their accounting documents. The new service requires only a simple scan of tax documents and business records to make all of this information available to dedicated accountants almost immediately for review and processing purposes.

“We are excited to bring innovative mobile applications to small-business owners. The desktop is so yesterday. Here at 1-800Accountant, we are creating technology for the future as more and more SMBs go mobile. 1-800Accountant will be their accounting and tax provider of choice, providing them accessibility anywhere, coupled with unparalleled customer support from their dedicated accountant,” said Brendon Pack, Vice President at 1-800Accountant.

To learn more about how 1-800Accountant can help your small-business from a tax and accounting standpoint, call 1-800-222-6868 or visit www.1800accountant.com.

5 Ways to Reduce Stress & Burnout as a Small Business Owner

Feeling stressed in your business? Consider these tips to reduce stress as a small business owner.

Feeling stressed in your business? Consider these tips to reduce stress as a small business owner.

Certain things we do in life can cause lots of stress, headaches, exhaustion, and even burnout. Being a small business owner can put you in this category at times if you aren’t careful. To recognize National Stress Awareness Day, consider these 5 tips to reduce stress as a small business owner so that you can maximize your enjoyment to self-employment:

1) Make organization a top priority in your business life.

By being organized in your business, you will have everything you need in the right places. This makes it quick and easy to find the things you need when you need them. Whether it’s a computer file, a sticky note, or a receipt you’ll need to claim the meals and entertainment deduction, being organized can greatly reduce the stress of looking for something at crunch time. Create folders on your desktop, and put appropriate files in each folder. Make contact lists in your smartphone for your partners, employees, and even clients. A smoothly run business is an organized one, so always keep organization in mind.

2) Learn to be a better delegator.

Delegating certain tasks to those around you takes pressure off your shoulders and, in turn, helps reduce stress for small business owners. CEOs of large corporations and owners of single-member LLCs or sole proprietorships can all relate when it comes to the benefits of delegating. There is nothing better than paying someone to handle things for you, especially if they have more experience doing what you don’t have time or the desire to do each day. You’ll know that any of your ancillary tasks are in good hands. Whether you need help filing your business taxes with the IRS, creating a website, or responding to phone calls or e-mails, there are potential employees, contractors, and business service providers out there that are all available to assist you – and help reduce your stress level.

3) Take breaks – and some vacation time.

The suggestion that being a small business owner is a 24/7/365 endeavor is not far off. With so much to do each day, you can’t let business ownership eat you alive because it can. Take breaks throughout the day. Go for a walk, do some stretches, or eat lunch out of your office for a change of scenery. In addition, don’t hesitate to take a day off when you need one. Long stretches of vacation time are often hard to take off when you’re running your own business, but there are ways of doing so. Think creatively and lean on your confidantes for assistance. You’ll probably be more refreshed and in a better mood when you take time away from your hectic enterprise.

4) Be in control.

To minimize stress, you must be in complete control of your small business at all times. Having this control can reduce your stress level by ridding your mind of lingering questions or an uncertain future. As a business owner, you should be very confident in your shoes. You should also have a full grasp on every minor detail involved in the workings of a venture, but get help when you need it.

5) Exercise and improve your diet.

It’s not always top-of-mind for small business owners, but diet and exercise are so incredibly important for entrepreneurs in all professions. It’s easy to grab unhealthy fast food on the go. It’s easy to sit behind a desk all day on conference calls. In the end, it’s easy to forget about eating healthy food and getting proper exercise each day. These activities can be a big stress-reducer for both individuals and small business owners, so don’t put them on the back burner.

Image credit: The image included in this blog post is used with permission via the Flickr Creative Commons license.