Tax Law (Questions About Taxes)/federal tax form schedule C
QUESTION: Hi MEdusa,
Small business, LLC
On federal tax form schedule C, can I claim a how to prepare food product demonstration as advertising?
If not, where can I claim the expense?
What documentation do I need for the IRS?
ANSWER: not to be evasive.. but it depends... all expenses can be "other" at worst case.. or advertising. but what do you do ? what did you do? how much do you make?
documentation needed is proof of payment and invoices all proper receipts saved for 3 years
where are you located
---------- FOLLOW-UP ----------
QUESTION: Hi MEdusa
What I do is own a wine and beer making supply store, but I also have workshops where customers can buy all the ingredients, use my equipment at the store, and I show them how to make wine or beer. Once they learn they usually buy the ingredients from me and continue to make wine or beer at home.
For those who are curious about making wine or beer, but donít want the expense of a workshop, I have demonstrations.
When workshops slow down, I do a demonstration to show folks how easy it is and to entice them to either buy ingredients or take a workshop. The ingredients cost money, so Iím thinking that is advertising. I advertise the demonstration on Facebook, email customers on record, and a window sign of the up-coming demonstration day and time.
The wine or beer made from the demonstration I give out to those who attended, and/or potential or existing customers. Free Ė no sale. I do not have my retail alcohol license or producer/manufacture (winery) license yet.
I started the business in March of this year and I havenít made any money yet. My costs are higher than my revenue. However, last month I broke even and this month, Sep will be close to breaking even again.
I really want my producing and selling retail wine license, micro winery. However Iím finding the government process overwhelming and canít afford an attorney right now.
I am located in Milford, MA 01757, 77th & Vine LLC, http://77thandvine.com/
I do understand this is just a casual conversation and we do not have any agreement whatsoever.
Let me know if you need further information.
Thank you Medusa,
i am in ct... so we are not far. that is good. :)
but short story long...
you can deduct all expenses related to what you are doing. but if you buy (or make) equipment, it has to be depreciated over time (usually 3,5, or 7 years). you can deduct all the cost of equipment in the year it is "placed in service" to the extent it is less than 250k (which is obviously the case). but you cant use that do "dig a hole" and go below zero income... you have to stop at zero for the equipment portion only. you can dig a hole and deduct that for other costs - supplies, etc. because you are trying to make money. (google hobby loss irs and read up on that). you have 3 years to make money and then you have to prove it is not a hobby. sounds like you are well on your way there. not a problem. yet. just want you to know what the hobby rules are.
so. in 2014...
you spend 100 on supplies and stuff and 80 on equipment and only get 150 in revenue.
you deduct the 100 stuff and 50 of the equipment and carry over 30 to 2015.
send me a new question but mark it PRIVATE. and i will give you my phone number