Are you a wedding planner?
Wedding planners are in a unique business, which means you’ll have business expenses specific to the work you do which can lower your taxable income. Below we’ve shared seven tax deductions you don’t want to miss if you are a wedding planner.
Office Related Expenses
Whether you rent office space in a remote building or work from home, you can deduct the expenses related to maintaining your place of business. These include rent paid, utilities, internet services, insurance, and office equipment.
If you work from home, and you have a dedicated office, you can take the home office deduction and deduct the expenses incurred in maintaining your home, based on the percentage of the home that’s used for business purposes.
Drive to meet with clients? Drive your clients around to see venues, meet contractors, and otherwise conduct business? You can deduct the business percentage of your total car costs, even if you use the car for personal reasons as well.
For example, total up the cost of car insurance, gasoline, repairs, maintenance, and interest on financing. If the business use of your car based on mileage is 70% of the total mileage driven for the year, you can deduct 70% of your auto expenses against your business income.
Alternatively, you can use the IRS standard mileage method. Keep track of your business miles during the course of the year. You can then claim 58 cents per mile for 2019 (54.5 in 2018). If your business mileage is $10,000 for the year, you’ll be able to deduct $5,800, which can be a huge tax saving. QuickBooks Self-Employed will help you easily track your mileage year round and that information can export to your TurboTax Self-Employed tax return at tax-time.
Marketing and Advertising
Much like any business owner, you’ll have certain expenses for marketing and advertising. There’s a long list of potential expenses here (use this list to start):
- Business cards
- Business stationery
- Direct advertising costs, like newspaper and magazine ads
- Expenses incurred in connection with maintaining a wedding planning website
- Flyers or brochures you’ve created to market your services in certain venues
- Referral fees you pay to get clients
Document any expenses you incur for your business and keep receipts since it all may be tax deductible.
Expenses Paid for an Event
There may be certain events where you will be paying for certain supplies or services out-of-pocket. For example, you may pay for the centerpieces on the tables. Those expenses are tax deductible.
Even if you’re reimbursed by your client for the expenses, you’ll still declare both – the reimbursement as income and the items you pay for out-of-pocket as expenses.
At a minimum, you’re likely to purchase a computer and a smartphone for your business. The cost of these items and other types of equipment needed to run your business are tax deductible.
There are two ways you can claim the expense. The first is by depreciation. For example, if you purchase a computer, you can spread the cost out over several years, taking a percentage of the depreciation expense in each year.
The other alternative is to use what’s known as Section 179 depreciation. That’s where you can claim the entire expense for equipment purchased in the year of acquisition. Under IRS regulations, you can deduct equipment for up to $1 million per year.
Travel and Meals Related to Your Business
You may have certain clients or events that require you to travel to remote locations. If so, your travel costs will be fully tax deductible. That includes airfare, ground transportation, and hotel accommodations. Those expenses are 100% tax deductible.
You can also deduct 50% of the cost of any meals you have with business clients (that you pay for), but make sure you keep your receipts, that list the client and the purpose of the meal. QuickBooks Self-Employed allows you to capture your receipts by snapping a picture of your receipts on your phone and saves the information which is matched to your expenses. Your expense information can then export to your TurboTax Self-Employed tax return eliminating data entry.
Paying Employees or Outside Contractors and Services
If you have one or more employees, you’ll be able to deduct not only the wages paid to that person but also other payroll related expenses. These include employer-paid payroll taxes, worker’s compensation, employee benefits, and related expenses.
Being self-employed, many wedding planners can’t afford the ongoing cost of maintaining permanent employees. More likely, you’ll hire help on an as-needed basis. This may be for either short periods of time, like you’re busy season, or for special projects. If so, you can hire people on a contract basis.
This not only creates a casual business relationship, but it also avoids the need to pay payroll taxes. You can pay these workers as independent contractors. But if the fees you pay for their services exceed $600, you’ll need to issue Form 1099-MISC.
Don’t worry about knowing these tax rules. You can track your business income, expenses, mileage, and estimate your quarterly estimated taxes year round with QuickBooks Self-Employed and then easily export the information to your TurboTax Self-Employed tax return, eliminating data entry.
TurboTax Self-Employed can also help you find industry-specific tax deductions you may not have been aware of. If you have questions, you can also connect live via one-way video to a TurboTax Live Self-Employed CPA or Enrolled Agent to get your tax questions answered.
TurboTax Live Self-Employed CPAs and Enrolled Agents are available in English and Spanish and can also review, sign, and file your tax return.