Are you a wedding planner?
While wedding planning may be a unique business to be in, the business expenses they incur can often be quite typical. Any expense – whether it is specific to the work you do or typical to all types of industries, can lower your taxable income. Here are 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, 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.
Transportation
Do you drive to meet with clients or drive your clients around to see venues, meet contractors, and otherwise conduct business? If so, you can deduct the business percentage of your total car costs, even if you use the car for personal reasons as well.
For example, if you total up the cost of car insurance, gasoline, repairs, maintenance and interest on financing and calculate 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.
If you didn’t have as many costs associated with the car but did rack up the mileage, you can use the IRS standard mileage method for the deduction. Make sure you keep track of your business miles during the course of the year. For 2024, you can claim 67 cents per mile driven for business purposes.
If your business mileage is 10,000 for the year, you’ll be able to deduct $6,700, which can be a huge tax savings. QuickBooks Self-Employed will help you easily track your mileage year-round, and that information can be exported to your TurboTax Premium 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 that are used on the tables. Since they are used for the purpose of the event, those expenses are tax deductible.
If you’re reimbursed by your client for the expenses, you’ll will declare both – the reimbursement as income and the items you paid out-of-pocket as expenses.
Business Equipment
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. This allows you to spread out the deduction over a few years based upon the expected useful life of the asset.
The other alternative is to use what’s known as Section 179 depreciation. That’s where you can deduct the total costfor the equipment purchased in the year of acquisition. Under IRS regulations, you can deduct equipment for up to $1,220,000 in 2024.
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.
You can also deduct 50% of the cost of any meals you have with business clients (that you pay for). Make sure you keep your receipts and list the client and the purpose of the meal. Also, to claim the deduction, the expenses should not be lavish or extravagant based upon your business circumstances.
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 be exported to your TurboTax Self-Employed tax return, which will help you eliminate data entry.
Paying Employees or Outside Contractors and Services
Being self-employed, many wedding planners can’t afford the ongoing cost of maintaining permanent employees. More than likely, you’ll hire help on an as-needed basis. This may be for either short periods of time, like your 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-NEC.
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 Premium tax return, eliminating data entry.
