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msar-riders - Re: [MSAR] tax deductions

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Subject: Mounted search and rescue

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  • From: "IRVIN LICHTENSTEIN" <ilichten1@verizon.net>
  • To: "'Mounted search and rescue'" <msar-riders@lists.ibiblio.org>
  • Subject: Re: [MSAR] tax deductions
  • Date: Thu, 27 Jan 2011 20:39:45 -0500

As a self employed consultant I was always getting audited, usually for C schedule, but nobody ever questioned the donation value claimed for SAR, or other good

works as they are classified by the IRS.  Some comments below:

 


From: msar-riders-bounces@lists.ibiblio.org [mailto:msar-riders-bounces@lists.ibiblio.org] On Behalf Of Thor Burfine
Sent: Thursday, January 27, 2011 3:31 PM
To: 'Mounted search and rescue'
Subject: Re: [MSAR] tax deductions

 

I deduct my expenses.

 

Let me elaborate.

 

Any and all hard costs – receipts for a search. (*not otherwise reimbursed)

Max deduction of mileage for the truck – log book (actual costs may be a better approach for a secondary vehicle)

50% deduction of mileage for the 36ft stock trailer (again actual costs may be better)

30% deduction of mileage for the 2 horse trailer              “

20% deduction of mileage for the ATV trailer                 “

I take a $25 per day deduction for each ATV I use plus fuel costs for the ATV’s (This is debatable unless you usually rent or the organization usually pays this rate. This is a forgone opportunity for income through rental.  You should probably bill and then write off the income by donating it back)

I take a $75 per day deduction for the boat plus fuel costs (above)

I take my total cost of feed for the year divide by 365 times number of days searching

                That amount is my feed deduction (Training time counts too)

I take $3 per day deduction on my tack (debatable, see above)

I deduct my search clothes (uniform) (Personal protective equipment is supposed to paid for by your organization, except in non-OSHA states, like PA)

I deduct cleaning my uniform (laundry mat machine costs) for each day on a search (should be for each mission and training session, not per diem)

My cell phone is a nightmare as I own my own company and it pays the bill so the company deducts (This is a schedule A versus C question and few auditors agree who should get the deduction—the company supplies and pays for the phone as a general expense, the employee benefits but usually not as much as the employer does

so no charge to the employee.  The per-minute charge is in the contract, no calculations required, just keep bills)

                All the calls made while on a search

                                Total cost of the phone for the year divided by

total number of minutes used for the year gives me cost per minute

Multiply the cost per minute times the number of minutes used during the search

                (usually about $16 for me so I don’t do it)

I replace my first-aid kits annually even if they have not been opened so they get deducted (Replace on expiration, use; not arbitrary number unless close to expiration)

Deep water recovery gear (265 foot depth) – Not had to use it but deduct the cost of keeping it ready to go. (Five year rule might apply, is there an annual training/certification course required?)

Any cost of repairs to equipment while on a search (Flat tires and such)

Also any Vet/farrier bills directly related to a search (or training)

 

As for vet and farrier bills

Take your total vet bills divide by 365 and multiply by the number of days searching and training

That will give you the amount that can be proportioned to SAR (Also any unique bills related to any or all searches—health certificates, extra vaccinations, special shoeing, etc. is fully deductible)   

 

All of this survived the last IRS Audit I went through.

The key is to document everything in a log book.

I was told by the auditor that there is no need for a receipt if any given expense is less than $50 (this is an auditor option based on commercial expense practices, keep the receipts as your meals while traveling to and from will not probably make the $50 amount)

As long as you have it written down in a log book with the date of the expense, what it was for and the amount. (receipts are better and should be kept)

 

My log book has 4 columns

Date      What     Amount               Case Number

+++++++++++++++++++++++++++++++++++++++++

I used to keep a desk diary but found that just keeping every receipt, bank and charge statement was more effective.  Last time I got audited overall I delivered 2 boxes of documentation to support the C schedule and the auditor eventually apologized for bothering me.  A no change audit also means 3 years of no audits for that area of the return—it is called harassment.  You should fill out ICS forms for check in and check out for every mission and training to further substantiate your presence.

 

The IRS looks for paper trails (or Quick Books).  I have found that scribbling on a receipt is often as good as logging an expense.  Incomplete logs often to lead to rejection of claims for deductions on the basis that they were fabricated after the fact.  If you log mileage for instance, use a commercial log book with date, time, location start and stop, and a description of the trip purpose—haul search horse to vet, go to Red Cross training in Boise, etc. If you claim a training course make sure you have the certificate and the bill.  Never underestimate the ignorance of the auditor in areas of charitable donations. I ran into one that had to shown the law that makes volunteer fire companies automatically 501c3, if they bother to apply for a determination (which this one had).

 

Deduct everything, every time. There is no law against arranging your income and expenses to minimize your taxes.  

Irv Lichtenstein

SE PA SAR

From: msar-riders-bounces@lists.ibiblio.org [mailto:msar-riders-bounces@lists.ibiblio.org] On Behalf Of Cindi Rothrock
Sent: Thursday, January 27, 2011 1:51 PM
To: msar-riders@lists.ibiblio.org
Subject: [MSAR] tax deductions

 

  Is there a form for deducting expenses for your search & rescue horse? What do most of you deduct........feed, farrier, vet, equipment, training expense?

  Any information is appreciated! Tks

 




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