Headers: Costs, Tax Deductions, Tracking Expenses
Conferences are expensive and generally held at beautiful hotels with lots of amenities. The plethora of amenities and super soft sheets usually translates to a higher rate per night and more expenses for exhibitors, attendees, sponsors, and organizers. More expenses translate to more money for the local economy and more tax deductions. How can more outlay cut your tax bill?
I estimate the average cost for attending Blog World 2010 with a full access pass is approximately $1600 – $2000 before calculating entertainment and paid meals while attending the conference. This only takes into account hotel, airfare, and a full access pass and I am assuming travel within the continental United States. This expense can actually save you money when thinking long-term. Bloggers everywhere are making money and transitioning into better jobs, better titles, higher tax brackets, and more opportunities as a direct result of the hard work put into their blogs. The majority of bloggers I interact with within the social media realm are blogging for extra income after their day job or a stay-at-home mom or dad who is using social media and blogging to get out of debt.
Regardless of the reason for monetizing your online experience; conferences used for business development are a deduction during tax time as long as you paid for the expenses and not reimbursed. Employees who attend a conference on behalf of their employer where the employer pays for expenses; even if that payment is in the form of reimbursement cannot write off reimbursed expenses. Bloggers who are self-employed and pay for their own way to a conference can write off the expenses as a legitimate business expense. Our tax code is full of loopholes and certain expenses are only partially deductible; such as food and entertainment. The IRS reasons that you have to eat and be entertained regardless of your physical location so, these types of expenses generally are deducted at fifty percent of the out of pocket expense.
What, your blog hasn’t made any money? That’s okay; a business can show a loss 3 out 5 years or 5 out of 8 years depending on the economy; this loss can be then be deducted from your taxable income from a mainstream job. What no mainstream job? But, the spouse has one. It can still decrease the amount of taxable income listed on your joint return. When you decrease your taxable income, tax liability decreases, and one of two things happen. Either the tax refund will increase or the amount of money owed to the IRS at the end of the year will decrease. Regardless, of your personal tax situation a decrease in taxable income will help your overall financial situation.
How do you take advantage of these tax benefits? Simply save every receipt from Blog World starting when you head to the airport. When paying cash such as tips or shuttle fare; keep a small notebook and write down the time, location, and amount of cash for that transaction. If you are one of the lucky few sharing a hotel room in order to cut costs, there are two ways to handle this situation. Make two copies of the receipt and write a notation on it saying the deduction will be split or the person who paid the hotel directly can write and sign a receipt for the person reimbursing them for the costs. The goal is to create a papertrail that shows the deductions are both reasonable and necessary for the attendance of the conference.
Nicole aka Finance Diva loves numbers and writes at http://FinanceDiva.com. She
has been repairing credit and preparing taxes since 2003. Finance Diva is registered with both the IRS and State of New York as a paid tax preparer. She started the site to promote her financial services and to help consumers do more with less. You can follow her on Twitter @nickelnm