My current hometown is overrun for the next week by South by Southwest attendees.
The convergence of music, films and technology brings tens of thousands of folks to the Lone Star State's capital and is the single most profitable event for Austin's hospitality industry.
SXSW also can pay off for the folks who come in for the conferences, panels and presentations. As today's Daily Tax Tip notes, if you're here in connection with your business -- be it a new Internet offering, a movie you've produced or your band's latest album (are they still called albums?) -- you might be able to deduct many of your SXSW expenses on your 2013 tax return.
In the spirit of the gathering, H&R Block has created a graphic novel look at deductible business expenses.
Tallying your expenses: If you're a small business owner who files Schedule C, pay close attention to Part II of that form.
It's where you'll be able to use your business expenses to reduce the gross income you reported in Part I, subsequently cutting your tax bill.
Allowable expenses include:
- Advertising costs,
- Car and truck expenditures,
- Commissions and fees,
- Legal fees,
- Repairs and maintenance,
- Office expenses,
- Home office costs (although this actually shows up under the expenses section; and don't forget your Form 8829),
- Depreciation and Section 179 expenses and, today's topic,
- Travel, meals and entertainment costs.
As the Block infographic notes, only half of the costs of meals and entertainment, whether talking business at over lunch at home or on the road, are deductible as a business expense.
And make sure that there is a business reason for that plate of barbecue you shared with the recording industry guys. This is an area that Internal Revenue Service examiners look very closely at.
Records are required: The best way to set an IRS auditor's mind at ease and ensure you get to keep all your tax claims is to have good records for your business expenditures.
This includes not only those incurred when on a business trip, but also all work-related expenditures when you're back at your office.
Thorough and well-kept tax records are the best way to guarantee you get all the deductions to which you're entitled.
So enjoy your time here in Austin. Here's hoping you close a lot of key business deals.
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