Luke Donforth wrote:

<<I've already had two inquiries, so I should specify, the $8000 was income paid not counting airplane tickets. It didn't remove mileage reimbursement, CDSS membership and insurance, etc.

Net comes to about $5000.>>

Luke, does your “net” figure represent what you have left after *all* expenses? Have you deducted 54 cents per mile driven (the IRS rate for 2016), whether or not you were reimbursed? (The alternative is to figure actual car expenses and deduct the percentage of those that corresponds to business use of the car, but it’s simpler to take the mileage allowance.) If you own any sound equipment, whether it’s a mic or a full system, have you expensed or depreciated each piece? (I’m not an accountant, but our accountants have always told us it’s OK to expense relatively small purchases rather than bother with depreciating them.)

The one expense we don’t bother listing is meals on the road. The IRS allows only 50 percent of those to be written off (rule adopted in response to the three-martini business lunch); much of the time we get fed by our hosts; we tend to eat cheaply when we’re paying out of pocket; and we figure we would have spent that much on food anyway. But all other expenses get itemized on Schedule C.

In a typical year our net (taxable) figure is less than half our gross. I agree that it’s a good idea to think about these things as one weighs how intently to pursue calling or playing for dances. I used to go anywhere for any amount of money, just for the joy of calling. Somewhere along the line I realized that I was losing money on many of my gigs, and I got more careful about pay scale vs. distance traveled.

For many years my rule has been “for love or money” – both is better, but one or the other is essential. If I suspect it’s going to be a tough gig (e.g. an open bar or a “family” dance where the parents won’t join in), I quote high enough that I won’t kick myself later. Conversely, I’ll go out for short money if it’s a chance to work with some treasured friends/colleagues, or if it’s a new series that wants help getting off the ground, or if I get to call lots of Merry-Go-Round-type squares <evil grin>.

Not specifically addressed to Luke: There’s a common belief that if the IRS decides your calling or playing is a hobby, you’re not allowed to deduct any expenses. On this subject, the IRS says only that losses can’t exceed gross income, so presumably you can deduct expenses down to the break-even point. Note that if you’ve made a profit in three of the last five years including the most recent year, the IRS assumes it’s a legitimate business.

Tony Parkes

Billerica, Mass.

From: Callers [mailto:callers-bounces@lists.sharedweight.net] On Behalf Of Luke Donforth via Callers
Sent: Tuesday, January 17, 2017 7:56 AM
To: Callers@Lists.Sharedweight.net
Subject: Re: [Callers] Totals for taxes

I've already had two inquires, so I should specify, the $8000 was income paid not counting airplane tickets. It didn't remove mileage reimbursement, CDSS membership and insurance, etc.

Net comes to about $5000.