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the cost of your show ticket. If you attend the entertainment alone or with non-business-related persons only, the cost would be considered personal and not deductible.

Tip #6: Don’t forget the tips.

Tips you pay to bellhops, maids, cab drivers, shuttle bus drivers, tour guides, etc. are deductible. Because most of these tips are paid in cash and no receipt is provided, be sure to keep a log of the date, amount, and purpose of the tip. Tips related to meals and entertainment are only 50% deductible.

Tip #7: Don’t deduct expenses that aren’t yours.

Confusion often occurs when a writer pays costs up front that are later reimbursed. For instance, a writer who presents a workshop at a library might be reimbursed for the costs of travel. If the writer must account to the library for the expenses, provide the library with receipts, and the library reimburses the writer the exact amount of the costs, the costs are considered to be costs of the library rather than the author.

The writer would not deduct the costs and would not include the reimbursement in income. On the other hand, if the writer were paid a flat travel expense amount regardless of actual expenses and did not have to account to the library, the expenses are considered to be the writer’s expenses. The writer would include the fee in income and deduct the travel costs on his or her tax return.

Tip #8: Don’t be a diva.

The IRS can deny or reduce costs that are lavish or extravagant. If you go out for a $200 dinner when more reasonable options are available, the IRS isn’t likely to be too happy and you could end up with a tax bill.

Tip #9: Personal expenses while traveling on business remain personal.

For example, if you travel for a book signing and schedule a massage alone at a local spa after the event, the fact that the massage takes place during a business trip does not make it a deductible business expense.

The massage is a personal cost and cannot be deducted.

Tip #10: Cruises and foreign travel are subject to special limitations.

Take a look at IRS Publication 463 “Travel, Entertainment, Gift, and Car Expenses” for a detailed discussion of these particular rules.

Happy summer travels!

Diane Kelly is a retired CPA/tax attorney and the author of the humorous Death and Taxes romantic mystery series and a self-published romantic comedy.

First Sale Stands for Now (as of presstime)

Federal judge Richard Sullivan: “The novel question presented in this action is whether a digital music file, lawfully made and purchased, may be resold by its owner through ReDigi under the first sale doctrine. The Court determines that it cannot.” Sullivan also called ReDigi a “clearinghouse for copyright infringement.”

Amazon was awarded a patent in January, and Apple has applied for one for a process to sell used digital items. http://www.scribd.com/doc/133451611/Redigi-Capitol Danger, danger, Will Robinson! PW Daily

New York and Taxes

The New York Court of Appeals in a large majority (4-1) upheld the state’s affiliated nexus law from 2008. This mirrors the passage of U.S. Senate’s Marketplace Fairness Act amendment (S.336) (75-24) to the FY2014 budget resolution. The basic concept is remote retailers (can we say “Amazon”) that have over $10,000 in affiliate sales have to remit and collect sales tax. PW Daily

 

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