If I go to GenCon as "Alexander Cherry, Sole Proprietor of Twisted Confessions" instead of as "Private Citizen Alexander Cherry", what sorts of things are generally considered deductible? (Yeah yeah, consult an accountant, etc.) This is my first year, so I know I don't need to worry about being "not-profitable" for however many years.

Things that I think I can deduct that are gencon-related specifically:

1. Hotel stay
2. Airfare
3. Transportation costs (taxi, etc.)
4. Any shipping costs incurred
5. Meals?
6. Any price spent on the booth (the $100 to Ron, the $60 badge)

Questions:

1. Am I missing anything?
2. Is there anything that on my list that I really can't deduct?
3. What tips or tricks do any of y'all have in regards to this sort of stuff? I'm planning on paying for everything with my business credit card and then just using the credit card statement. Should I keep anything else (individual receipts)?

I direct you to this article on business expenses in the small business section of the IRS web page.

The IRS web page is surprisingly well organized, and sufficiently "lay" for general use. As long as you aren't trying anything complicated, most answers can be found there with a little searching.

I spoke with my accountant and he said to keep all my receipts and he will sort them out. Over the years I have found that generally he can read the tax code better than I can and will find things I didn't when I read the IRS site.

Keith

How much does having your very own accountant cost?

Essentially, anything you spend on the trip can be deducted to one degree or another, excepting clothes (unless they're uniforms) because clothes would be deducted elsewhere (in your personal deductions). I even include many of game-related purchases (dice and mats fall into my demo expenses and RPGs into research).

Most items can be deducted full value on your taxes, but meals (for example) you can usually only take 50% of the value. Check out the instructions for form 1040 Sch C, since that's the form you'll use to claim those deductions. Just make sure to keep your receipts, as Keith recommends.

As for getting your own accountant... it depends on who you talk to and how much business you do. I was once offered a service for $50 a month and $100 extra for tax prep. For that amount they would enter all your receipts and invoices and give you a month-end summary. I don't know how competitive that is or exactly how many monthly transactions they'd enter for that fee because I decided not to use it. I have a client who uses a similar-style service and I can check with her on her fees if you'd like, but your local yellow pages would probably prove more useful.

Thinking back to my accounting course, that sounds about right.
And yea, if you can find a place to squeeze it in you can fit a lot under your expences ^_^ Quite remarkable really what GAAP allows...*wanders off to dig out Accounting book*

As I came to the point to start paying for things I called my accountant who takes care of my normal taxes and he told me just to keep track of my expenses and any profits (meaning any money I take in, not that I will be making more than I put in) and to bring it to him come tax time. I'm meeting with him to go over specifics in a month, but since I am doing business as a private individual (sole-proprietor{sp?}) and I'm not going to be making lots of money (if any) filing will be similar to my normal filing only with more deductions. I think my total expenses will be a little over $100 (normal filing plus my meeting in a month). He told me I don't need to hire an accountant, just keep track of everything I spend in an Excell sheet, Quicken or with some other means and give to him com tax time. Seemed to make sense since in IL a sole proprietorship (sp?) business is simply a declaration that I a private citizen will be doing business under the name XYZ (in my case bobgoat.com). That is at least my understanding of it prior to the release of my game (some time in July depending upon my cover artist. However, someone else here who has actually done this may have a better grasp and tell me I'm completely full of shit, which would be fine since I have a BA in Fine Arts not business.

Keith

That's pretty much right Keith.

The only difference you will have in your normal taxes is that the line for Business Income on the 1040 will have a number in it. And that number will come from attaching Schedule C to the tax form.

Schedule C has 2 parts, income and expenses, with a couple extra work sheet sections.

Schedule C is EXTREMELY easy and straight forward unless / until you try to start claiming items that would normally be personal expenses (and not deductable) as business expenses.

As long as you don't try to write off part of your car payment as a business related expense or part of your rent/mortgage for having a "home office" its completely as simple as saving your receipts and making sure any free lancers give you invoices. If you do start trying to claim personal expenses it gets more complicated pretty quickly, because thats one of those loop hole areas the IRS tries pretty hard to stymie, but your accountant should be familiar with all of that.

The only other issue on the Scedule C is that you have to track your inventory (in dollars) for purposes of coming up with Cost of Good Sold.

If you print up 300 books for $2 apiece you can't claim $600 in expense (unless you sell them all). You claim whatever the difference is between the cost of the books you started with, and the cost of what you have left (hense Cost of Goods Sold). There's several lines on the C that walk you through this, so even that's not that hard as long as you keep good sales records.

In addition to keeping reciepts for meals and such, there is allowances for daily stipends (just claim $30/day for meals) but there are alot of rules governing that (see link above).

Using TurboTax I recently completed my 2003 taxes, with profits from Half Meme Press as Schedule C income. Other than the "keep your receipts" advice, here are a few things I wish I'd known to do in 2003:

1. If there's the chance you'll put your vehicle to use for your business, you should record the mileage on it at the beginning and the end of the year. I took my truck to GenCon last year. And it was easy to use MapQuest for calculating those miles. But the tax form also asks for a total of how many miles were driven by the vehicle throughout the whole year. And TurboTax insists that this is required information.

2. Record how much inventory you have on hand at the beginning and then again at the end of the year. You can reduce your Schedule C income only by the cost of what you sold.

I made the mistake of printing a hundred copies of My Life with Master late in the year. Don't do this. It costs you money and doesn't reduce your tax burden. Print only what you can sell prior to year end. If you need to reduce your Schedule C income, buy a trade show banner or business cards or something instead.

3. There are two big targets to shoot for with your Schedule C: expenses greater than income, which is the one I knew about, and income less than $400 greater than expenses, which is the one I didn't. In my case, if I could have reduced my income by an additional $90 or so of expenses I would have paid $75 less tax. Not "tax on $75 worth of income" but a whole $75 less tax! This is because you don't pay any "self employment tax" if your Schedule C income is less than $400 more than your business expenses. (Self employment tax is a Social Security tax paid against Schedule C income.) There isn't much I could have done to have expenses greater than income for Half Meme Press, but if i'd kept better track of receipts for the lumber I bought for the GenCon display unit, and maybe ordered some business cards in December, I could have paid $75 less tax overall.

Paul