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Ways to write off scuba trip as business expense?

Discussion in 'Advanced Scuba Discussions' started by Schwob, Mar 12, 2017.

  1. Schwob

    Schwob Solo Diver

    # of Dives: 200 - 499
    Location: Illinois
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    I am asking this in the advanced forum, because I would consider finding ways to successfully write off scuba trips as a business expense an advanced skill. Not objecting to having this moved to a more appropriate forum topic.

    So, what line of work and what reasoning could one entertain being in to successfully write off scuba trips as a business expense?
    Maybe as a travel "office" testing outv"the waters" prior to sending valued customers?
    As a writer, writing about sich trips maybe?
    Would one have to prove relevancy or reader numbers somehow?
    Might adverse situations, bad news. danger, accusation and intrigue help the cause?
    This post comes to mind, but let's not make this about that post... it's long enough...:
    Insta-buddy dangers when women take dive trips unaccompanied

    In what ways, for what line of work / business could a scuba trip be a legitimate business expense? What would make it an unlegitimate one?
     
  2. SOFDiver

    SOFDiver Captain

    # of Dives: 2,500 - 4,999
    Location: Venice, FL
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    I am a USCG 100 ton Master and an Active Dive Instructor. I have established myself as a Independent Contractor and perform work for a dive operator and teach independently as well. Income to me is reported to IRS on a 1099 and I claim my business expenses on my tax return.The IRS expects you to have a reasonable income from business activity in order to claim expenses. You can loose money but not over a long period of time. I suggest you consult a knowledgeable tax professional tone sure you don't get in trouble.
     
    northernone and Lorenzoid like this.
  3. Hoag

    Hoag Loggerhead Turtle

    # of Dives: 200 - 499
    Location: Ontario - Just outside of the GTHA
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    I used to have a very good situation. I am retired from the RCAF, but while I was still serving, I was in a job that would send me to Tyndall Air Force Base in Panama City FL once or twice a year on "TD" or "Temporary Duty". One of these TD trips to Tyndall, was for about a month. I used that opportunity to get certified in the evenings after work. After that, every TD trip to Tyndall included me bringing my dive gear and at least a day or two of diving.
     
    JBFG likes this.
  4. Wookie

    Wookie Secret Field Agent ScubaBoard Business Sponsor

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    For it to be a business expense, you must have a business. To have a business, in many places you must have a business license and even be qualified/certified/taxed/registered to be in business. So first, you have to determine what your business is. Is your business as a travel writer? Are you a travel agent? (Be careful with this one, it's the one that comes to mind regarding your business license and certifications and Errors and Omissions insurance, etc). The IRS isn't going to be happy with you saying "I'm a tour operator" without supporting documentation, like articles of incorporation etc. I've been in the scuba business a long time, but I'm actually in the dive business, so it's pretty easy for me to prove I'm in the dive business. All they really need to do is look at my tax return and see that professional filing cost me about 3 grand a year to let them know that I'm not trying to write off a lousy $2500 trip.....
     
    northernone likes this.
  5. Bob DBF

    Bob DBF Solo Diver

    # of Dives: I just don't log dives
    Location: NorCal
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    Hire a real good tax professional because even if he gives you good advise and you follow it, you may still be looking at an audit. It cost my wife and I over a grand that ultimately showed the IRS owed us a couple hundred bucks. Thank god my wife keeps meticulous records. With the help of the tax lawyer we quit using the deductions that could trigger an audit because it would cost several times it's value to defend. Ours was not a "hobby" business, which would catch their attention even faster.

    Wookie just covered how the IRS finds a hobby business.


    Bob
     
    northernone and Lorenzoid like this.
  6. diving4ever

    diving4ever ScubaBoard Supporter ScubaBoard Supporter

    # of Dives: 200 - 499
    Location: San Francisco
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    It's worth mentioning that travel expenses for volunteer projects can be fully tax deductible. This might be a better option since it doesn't require associated business income. You need to be working with a US tax exempt nonprofit. REEF comes to mind. Here are the IRS guidelines:. Tips for Taxpayers Who Travel for Charity Work
     
    Schwob likes this.
  7. Rred

    Rred Manta Ray

    # of Dives: 200 - 499
    Location: In a safe place
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    Even with a business license...the IRS tends to say that if you haven't made a profit in three years out of five, your activities are a hobby and they will disallow them. And then come looking for more.

    If you want to write something off as a business expense, be very careful about taking too many expenses (you are not required to take or show all actual expenses) and putting your "business" into losses, despite whatever our new POTUS has done with his affairs.(G)

    If you already have established credentials as a writer or photographer or travel agent...by all means, the field trip can be the basis for research and subsequent article or photo sales. That's valid, but you'd better have documentation showing that you made a real (and realistic expectation) of sales of your product, whether they came true or not.

    And as 4ever notes, charitable expenses for a "working vacation" can be a good idea even if that's not a total write-off.
     
  8. JamesBon92007

    JamesBon92007 Great White

    # of Dives: 2,500 - 4,999
    Location: Southern California...too far from the ocean
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    One thing that comes to mind is if you are looking to buy vacation rentals then your airfare, hotel, and rental car could be deductible and if you take the real estate agent on some dives and out to dinner those could also be deductible. Personally I think this would be best done as an LLC and of course make sure you get the agent's card. As far as writing goes I'm not so sure that would be easily justified because you can write about a place without actually being there but if you take photographs to go with the story.... Another thought is if you were in the business of selling dive gear you could visit the dive shops at your destination and demonstrate your wares on some dives, take the owner out to lunch, etc.

    This is all based upon my previous experience owning a business and I have not actually done these particular deductions yet so I would definitely suggest looking into it further. I have taken so many legitimate deductions in the past that it looked like I made hardly any money and nobody ever audited me but make sure it appears to be legitimate and not ridiculous.

    Are you familiar with how a LLC works?
     
  9. Lorenzoid

    Lorenzoid ScubaBoard Supporter Staff Member ScubaBoard Supporter

    # of Dives: I just don't log dives
    Location: Atlanta, USA
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    Whether it's travel writing, photography, doing travel agent-type field research, or doing charitable work, the bottom line is that if it feels to you like it's not really "work," then there's a good likelihood the IRS is going to feel the same way. We occasionally read about people who say they just love doing what they do and it hardly feels like work to them, but those situations are rare (and some of those people are probably a little weird). If it feels more like fun than work, that should be a red flag to you that the IRS is likely to scrutinize whether it's really just your "hobby," not your work.
     
  10. ReefHound

    ReefHound PADI Pro

    # of Dives: 1,000 - 2,499
    Location: Houston, TX
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    You can take any deduction you want so long as you don't get audited. ;-)
     

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