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income tax question for future planning
Old 03-16-2016, 04:36 AM   #1
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income tax question for future planning

'IF' i were to take this part time job as a whitewater raft guide, I would be required to report this income. No problem with that. But, this job is seasonal/part time. I will have to drive 500 miles one way for the job and pay living expenses while there. i'm 100% positive that my expenses will be way more than my income. I know that i cannot deduct commute mileage, but the 500 to get there should be qualified as a deduction, in my opinion.

i file with TURBO TAX if that make a difference.
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Old 03-16-2016, 05:02 AM   #2
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don't know. If you are "moving" to get the job... then I believe the answer is yes.

check this link

Unfortunately I have no first hand experience with your situation.
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Old 03-16-2016, 06:48 AM   #3
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Would you be an independent contractor? If not, could you be one? Being paid on a 1099? If so, the entire 500 miles, and living expenses, may be deductible.

If you are a W2 employee, and you actually move, the 500 miles may be. If you do not change your residence, the entire 500 miles may be viewed as a commute. Or the cost of a job search. Or maybe even a hobby.
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Old 03-16-2016, 07:19 AM   #4
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It's whether or not the tax code says you can. The IRS does not care one bit about your opinion.

I found this in about 10 seconds.

https://www.irs.gov/taxtopics/tc455.html

Quote:
If you moved due to a change in your job or business location, or because you started a new job or business, you may be able to deduct your reasonable moving expenses but not any expenses for meals. You can deduct your moving expenses if you meet all three of the following requirements:

Your move closely relates to the start of work
You meet the distance test
You meet the time test

...
[The first two look good. The third one kills it.]

The time test - If you are an employee, you must work full-time for at least 39 weeks during the first 12 months immediately following your arrival in the general area of your new job location. If you are self-employed, you must work full time for at least 39 weeks during the first 12 months and for a total of at least 78 weeks during the first 24 months immediately following your arrival in the general area of your new work location. There are exceptions to the time test in case of death, disability, and involuntary separation, among other things. See Publication 521 for these exceptions.
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Old 03-16-2016, 07:43 AM   #5
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See: http://www.irs.gov/taxtopics/tc511.html


If your temporarily away from your tax home, you can deduct business expenses. The key would be defining your tax home, which is not the same as your residence. If the only place you are earning income is in the white water town, then that would be your tax home and thus you couldn't take expenses. And moving expenses has both a distance and time test as pointed out earlier. I don't think the involuntary separation argument would get far if you knew going in that the job will end unless you stayed in the white water area continuing to seek employment.
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Old 03-16-2016, 09:43 AM   #6
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Assuming that you are a W-2 employee, you may be able to deduct your travel and living costs as unreimbursed business expenses which would include "Travel, transportation, meals, entertainment, gifts, and local lodging related to your work." Only expenses in excess of 2% of your AGI would be deductible on Schedule A. Also see Unreimbursed Employee Expenses" under https://www.irs.gov/publications/p529/ar02.html and Business Travel Expenses https://www.irs.gov/taxtopics/tc511.html

Quote:
You can deduct travel expenses paid or incurred in connection with a temporary work assignment away from home. However, you cannot deduct travel expenses paid in connection with an indefinite work assignment. Any work assignment in excess of one year is considered indefinite. Also, you may not deduct travel expenses at a work location if you realistically expect that you will work there for more than one year, whether or not you actually work there that long. If you realistically expect to work at a temporary location for one year or less, and the expectation changes so that at some point you realistically expect to work there for more than one year, travel expenses become nondeductible when your expectation changes.
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Old 03-16-2016, 10:09 AM   #7
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You might set it up as a small business, have them pay the business instead of you, and then you can deduct the costs.
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Old 03-16-2016, 11:35 AM   #8
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Originally Posted by DrRoy View Post
You might set it up as a small business, have them pay the business instead of you, and then you can deduct the costs.
Just make sure good liability insurance
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Old 03-16-2016, 11:36 AM   #9
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Originally Posted by pb4uski View Post
Assuming that you are a W-2 employee, you may be able to deduct your travel and living costs as unreimbursed business expenses which would include "Travel, transportation, meals, entertainment, gifts, and local lodging related to your work." Only expenses in excess of 2% of your AGI would be deductible on Schedule A. Also see Unreimbursed Employee Expenses" under https://www.irs.gov/publications/p529/ar02.html and Business Travel Expenses https://www.irs.gov/taxtopics/tc511.html
And of course to use Schedule A, your total itemized deductions would need to be more than your Standard Deduction to obtain any financial benefit.

-gauss
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Old 03-16-2016, 11:42 AM   #10
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Good point.
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Old 03-16-2016, 12:18 PM   #11
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Have them pay you salary, plus per diem rate for travel and meals.
The per diem rate is tax free and no receipts needed, rates are set by irs.
Your total income will probably end up tax free.

This will get you started:
https://www.irs.gov/pub/irs-drop/n-15-63.pdf

Don't expect them to know about it, so you have to find the web pages where the irs details it out, so you can tell them/show them.
Their accountant may/may not know about it either.
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Old 03-16-2016, 01:14 PM   #12
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I would steer clear of working as a contractor, primarily because of liability concerns.

If something goes wrong on the river, there will be a lawsuit. If you are an employee of the rafting company, their attorneys will (at least somewhat) on your side. If *you* are found responsible for the accident, the company is liable because they hired and trained you.

However if you are working as an independent contractor, you are responsible for your own liability insurance ($$$). You would have separate counsel in any lawsuit (more $, unless you trust the attorneys from your insurance company. Then, it's possible that the attorneys for the rafting company will try to blame you for the accident in order to protect the rafting company. It won't be worth the risk, just to save some on income tax.

Does this have to be a money-maker for you to sign on? I was recently re-hired by a rafting company that I worked for 20+ years ago. I don't even know what my pay will be...I'm looking at it as a way to be able to get on the river while collecting a little paycheck (that will have to be spent on re-equipping myself so that I can get on the river again). But I don't have the same travel and lodging expenses that you will since the starting point is within a mile of our vacation home.
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Old 03-16-2016, 03:43 PM   #13
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I've done a few tax returns for seasonal whitewater guides and they were all 1099 MISC contract employees. Go ahead and do the schedule C, claim expenses and expect an audit. In other words I wouldn't go after living or traveling expenses especially if you expect to be taking a loss. Just my two cents, not worth the potential hassle.

Also keep all receipts and documents that you may need in the event of an audit.
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Old 03-17-2016, 04:05 AM   #14
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Thanks for all the replies. You brought up some good points (law suit) that i had not considered.

Philliefan>>> Thanks for your reply as I relate to that. I am taking the raft guide class in two weeks just for the fun of it. I understand they will be offering me a job . i take quite a few trips to the mountains every year and deducting my expenses would have been nice.
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