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warscout2
09-29-2008, 22:14
So there are 2 ways i think i might be able to write of some of my gear. First im a rescue diver and i think i should be able to write off my new wetsuit because i bought it for this. Secondly i wounder if i could write off other gear once im an instructor? I know that i need to go talk to my CPA but does anyone have any idea i this.

kong
09-29-2008, 23:06
It really depends on how you do your taxes.

If you are classified as an independent contractor instead of an employee and receive a 1099 instead of a W-2 then you can claim the income as business income instead of regular wages. This opens up a whole bag of goodies. You can deduct reasonable business expenses (equipment, home office deduction if you have an area of your house/apartment set aside just for scuba stuff and doing business, meals with clients, portion of cell phone bill related to clients, mileage (currently $.585 per mile) in certain situations or actual operating expenses.) The best part is that a business can generate a loss so you can have a "loss" from your scuba business and use it to offset income from other sources (day job).

If you are classified as an employee, then you can deduct unreimbursed job related expenses subject to certain limits. This is an itemized deduction, so it will only work if you already itemize your deductions. Most people who own a home itemize their deductions because of the allowance for mortgage interest and property taxes while those who rent normally take the standard deduction, but everyone is different based on their situation.

Most shops would probably want you to be an independent contractor so that they don't have to worry about payroll taxes and the liability issue isn't as big as with employees.

ReefHound
09-29-2008, 23:26
The best part is that a business can generate a loss so you can have a "loss" from your scuba business and use it to offset income from other sources (day job).

Be careful there, if the scuba business is small enough it may be considered "hobby" income.

kong
09-29-2008, 23:37
A lot of that depends on how you carry on your business. It must be entered into with the intention of making a profit and conducted on a professional business like level. It also is good to have a profit every few years or at least break even. The main thing is not to get too carried away.

Even if it is classified as hobby income, hobby expenses can be deducted to the extent of hobby income which would zero out any money you were to receive. But you do have to itemize your deductions to deduct hobby expenses. Hobby income also is not subject to self employment taxes so each one has its benefits and drawbacks.

CompuDude
09-30-2008, 00:15
So there are 2 ways i think i might be able to write of some of my gear. First im a rescue diver and i think i should be able to write off my new wetsuit because i bought it for this. Secondly i wounder if i could write off other gear once im an instructor? I know that i need to go talk to my CPA but does anyone have any idea i this.

Step 1) Get paid. Without this, you're not going to have much luck writing anything off.

Step 2) If you want to help GREATLY with the odds of surviving an audit, you'll want an actual professional certification (Dive Master is the lowest professional cert level), not Rescue Diver, which is a great cert, but it's not a professional rating. Unless by "Rescue Diver" you mean someone employed by law enforcement or the fire department to conduct actual in-water rescues (these are usually referred to as Public Safety Divers, though).

warscout2
09-30-2008, 04:48
Step 1) Get paid. Without this, you're not going to have much luck writing anything off.

Step 2) If you want to help GREATLY with the odds of surviving an audit, you'll want an actual professional certification (Dive Master is the lowest professional cert level), not Rescue Diver, which is a great cert, but it's not a professional rating. Unless by "Rescue Diver" you mean someone employed by law enforcement or the fire department to conduct actual in-water rescues (these are usually referred to as Public Safety Divers, though).
I am a rescue diver for the Virginia beach marien rescue team we are part of local EMS and i know that i can write off things like my pager and uniforms.

ReefHound
09-30-2008, 10:33
You can usually write off special tools and equipment and training needed to do your job (isn't your wetsuit your "uniform"?) but again there are exceptions and conditions you have to heed.

fireflock
09-30-2008, 11:45
If your decision to become a divemaster, instructor, or whatever.... depends on you ability to write off a few hundred dollars on your taxes, you're likely to be disappointed.

The vast majority of DM's and instructors loose/spend much more than that over the course of their 'career'.

It's not a money making proposition for most. In fact, you'll probably loose money. If that turns you off, then you should probably reconsider your plan.

BuzzF117
09-30-2008, 11:55
Step 1) Get paid. Without this, you're not going to have much luck writing anything off.

Step 2) If you want to help GREATLY with the odds of surviving an audit, you'll want an actual professional certification (Dive Master is the lowest professional cert level), not Rescue Diver, which is a great cert, but it's not a professional rating. Unless by "Rescue Diver" you mean someone employed by law enforcement or the fire department to conduct actual in-water rescues (these are usually referred to as Public Safety Divers, though).
I am a rescue diver for the Virginia beach marien rescue team we are part of local EMS and i know that i can write off things like my pager and uniforms.

I am not a CPA or anyother tax pro and don't even pretend to be one but...under that circumstance you may be able to deduct it since it would probably fall under the guidelines of "tools" unless they reimburse you for it. I deduct my cellphone and any tools I buy throughout the year for my job since it's stuff I am not reimbursed for and I cannot do the job without them. Oh yeah it won't really amount to much of a deduction even if you itemize.

CompuDude
09-30-2008, 14:11
Step 1) Get paid. Without this, you're not going to have much luck writing anything off.

Step 2) If you want to help GREATLY with the odds of surviving an audit, you'll want an actual professional certification (Dive Master is the lowest professional cert level), not Rescue Diver, which is a great cert, but it's not a professional rating. Unless by "Rescue Diver" you mean someone employed by law enforcement or the fire department to conduct actual in-water rescues (these are usually referred to as Public Safety Divers, though).
I am a rescue diver for the Virginia beach marien rescue team we are part of local EMS and i know that i can write off things like my pager and uniforms.

I am not a CPA or anyother tax pro and don't even pretend to be one but...under that circumstance you may be able to deduct it since it would probably fall under the guidelines of "tools" unless they reimburse you for it. I deduct my cellphone and any tools I buy throughout the year for my job since it's stuff I am not reimbursed for and I cannot do the job without them. Oh yeah it won't really amount to much of a deduction even if you itemize.

I agree, I'm not a CPA either but that sounds like a situation where you can reasonably justify some deductions. Where you have to be careful is deducting the full cost of gear that gets used for both personal diving and "work" diving. Talk to your CPA about how to deal with that, but often there is a proportional split... if your gear is used for 70% personal diving and 30% rescue diving, you can reasonably deduct 30% of the cost.

A lot of instructors I know split all their gear deductions 50-50.

warscout2
09-30-2008, 15:36
Thanks for all your help

Doug B
09-30-2008, 21:06
I'm not a CPA or a tax planner, but I've stayed in a Holiday Inn Express a time or two.

Seems like a lot of work to me.... to save a couple hundred dollars. I think I'd rather spend the time having fun.

warscout2
09-30-2008, 21:55
ya but if your already itemizing it could be worth it

MR.BLUE
10-01-2008, 01:21
If you decide to write it off as an un-reimbursed expense, equipment, etc...take the equipment out on your teams drill/training dates and be sure to get some pictures of you with the gear at these training events,...rescue vehicles in the background,...you get the idea. this leaves no doubt that you have used it for the purposes you have detailed on your taxes.

warscout2
10-01-2008, 01:37
thats a good idea i guess i will have to be less camera shy