Tax Time and Writing Off Records/DJ Expenses

[ao125]

One VERY important thing to keep in mind when trying to write off records, turntables, needles, etc. on your taxes is that your MUST be able to show some income, or else they can not be written off... so anyone getting paid "under the table" by club/bar owners can't write these things off... unless of course the club/bar wants to start backing you up.

However, you can save your recipts from this year and write them off next year. Technically the assets are not "consumed" until they are proven used... so building a record collection in 2002 and 2003 can be written off in 2004 once you show income... same goes for hobbies.

I just got off a very long and drawn-out phone call with my accountant who dashed every single hope I had of writing off about 700 in records this year.

:owned:

just FYI.

[mattb]

Fuck taxes. I'm quite bitter about the amount that I OWE this year. bleah...

[rajdeep]

The Amtrak DJs essay by Krishna:

How to write your DJing off on your taxes

[rajdeep]

Technically you can classify DJing as a small business. However, to maintain this status for tax deduction purposes you cannot have more than 3 consecutive years of losses (expenses > income, even if income = 0). So, what they're saying is that after 3 years the business does not become profitable then it's a hobby and you can't take any more deductions.

As for the income bit, it becomes imperative that the 3rd year you show some profit thus be able to report any incomes, tips or wages received. However, anything earned above $400 is taxable though.

[Gizmo]

I was just about to ask the likelihood of me writing off my college book expenses and getting anything back for it...

paying for school sucks.

[Wickity]

It's not true. You can go for about 2 years without any income. As long as you are able to show that you are in fact pursuing it as a money making hobby, then you don't actually need to show income or a profit.

[ao125]

Originally posted by rajdeep
The Amtrak DJs essay by Krishna:

How to write your DJing off on your taxes

I actually gave that to my accountant (http://www.kwccpa.com) with a huge stack of recipts and it got me all of nowhere.

[rajdeep]

Do it yourself. I did the same and believe me it helps you in planning for the coming year. It does involve a lot of references etc. but it's worth the education.

[rajdeep]

Originally posted by Gizmo
I was just about to ask the likelihood of me writing off my college book expenses and getting anything back for it...

paying for school sucks.

You should research a bit if you itemize your deductions. There maybe cases which apply to you e.g. returning to school, classes taken to aid in seeking a better job etc.

Even if you may not have met the requisite criteria for this year, it will help you plan for the coming year.

:thumbsup:

[ao125]

Is there time to list myself as self-employed (non-w2) on this year's taxes or is it a moot point until next year?

[rajdeep]

Depends on your state of residence. MD allows you to register your business sometime through April.

http://www.choosemaryland.org/busine...ting/index.asp

[Wickity]

And you don't need to register anything if it's just a money making hobby.

[rajdeep]

Well, then you can't take deductions!

[Wickity]

Yes you can... That exactly how my accountant did it last year. You can net out your income vs. expenses, and take that as either income or a deduction. No business required, you're just allowed to do that. You can only have 2 "money making" hobbies in any given year though. that's it.

[rajdeep]

I'm pretty sure if you classify DJing as a hobby you can't take any deductions.

The deductions have been provided to incentivize small businesses. Thus, they expect you to make a profit after a certain period and once you get paid $400 and above start paying taxes on those wages. I'ts not really a free ride as it may seem.