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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 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 Deduct everything, every time. There is
no law against arranging your income and expenses to minimize your taxes. Irv Lichtenstein From:
msar-riders-bounces@lists.ibiblio.org
[mailto:msar-riders-bounces@lists.ibiblio.org] On Behalf Of Cindi Rothrock
|
-
[MSAR] tax deductions,
Cindi Rothrock, 01/27/2011
- Re: [MSAR] tax deductions (USA only), Una Smith, 01/27/2011
-
Re: [MSAR] tax deductions,
Thor Burfine, 01/27/2011
- Re: [MSAR] tax deductions, IRVIN LICHTENSTEIN, 01/27/2011
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