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OT: Need advice on budget for tax write off
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.[Terence Curren] “You can’t write off your donation of time in the United States.”
And I’ll third this. You can’t.
There’s no way to put a legitimate monatary value on that time. Otherwise, people could say things like, “I volunteer to sweep your floors for $10,000 per hour.” And then wipe out their tax obligation in, say, two hours!
If you’re trying to go into business, find an accountant. They’ll help you deal with the income from those invoices, and answer your questions like this one.
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Well, I’ll have to check this with my organization when I go back tomorrow, but while you have a point in the sweep the floors for $10,000 an hour thing, I don’t think this is the same. Yes, it is a service, but there’s also physical products that I donated, the DVDs with the videos that I made for them. And I can assign any price I want to those DVDs in the same way that when you buy an educational DVD of any kind they are charging obviously not just the few cents that the DVD media costs, but 99.99% of the price is the work that actually went into producing that DVD, from the conception of the idea, going through the production, video taping, editing and final delivery on DVD, whether it’s mass produced or not.
Of course I could find an accountant like you suggest, but I don’t have the money for that since all I could afford went into equipment.
Still, while I appreciate all the responses regarding the tax thing, what I really would like to know, which was the point of me posting the description of my work, is how much would a small video production company charge for a job like this, which not only I need in case I’m able to write this off in my taxes, but also in the case I do it again for any company or organization and I charge for it.
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Yep, tangible goods only. You do this stuff out of the kindness of your heart. The trick is to make them fully aware of the value and then your compensation is advertising, free press, adding logos to packaging (I think you mentioned that one) maybe get a tasteful ad at the end credits, that sort of thing. They can also be a source for potential clients like on marketing/PR committees.
Steve
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[Sebastian Alvarez] “what I really would like to know, which was the point of me posting the description of my work, is how much would a small video production company charge for a job like this, which not only I need in case I’m able to write this off in my taxes, but also in the case I do it again for any company or organization and I charge for it.”
Rates for services vary all over the country and job by job. They also come under the heading of proprietary information for most businesses. I for one and not going to tell my competition what I get on specific jobs, but anyone can read my “rate card.”
As for the tax thing, you are not getting it. If you spent money on goods and gave them away, you’ve already expensed them through your business and the fact that you make no income on them makes them a wash on your tax return. But you can’t write-off what you “could have” sold them for.
I’m not a tax attorney or a lawyer, but it is very clear in the IRS rules that what you are trying to do isn’t acceptable. Granted you can put anything you want on your tax return. And you can even plead ignorance later on if you get audited. But the best you could hope for would be to have to pay the difference plus interest. Worst case, if they proved intentional fraud (which wouldn’t be hard with all the public trail here), you could end up in federal prison.
Is it worth that risk to ignore what we are telling you? If so, knock yourself out.
Terence Curren
http://www.alphadogs.tv
http://www.digitalservicestation.com
Burbank,Ca -
[Terence Curren] “As for the tax thing, you are not getting it. If you spent money on goods and gave them away, you’ve already expensed them through your business and the fact that you make no income on them makes them a wash on your tax return. But you can’t write-off what you “could have” sold them for.
I’m not a tax attorney or a lawyer, but it is very clear in the IRS rules that what you are trying to do isn’t acceptable. Granted you can put anything you want on your tax return. And you can even plead ignorance later on if you get audited. But the best you could hope for would be to have to pay the difference plus interest. Worst case, if they proved intentional fraud (which wouldn’t be hard with all the public trail here), you could end up in federal prison.
Is it worth that risk to ignore what we are telling you? If so, knock yourself out.”
This seems pretty harsh to me. “Fraud”, “…wouldn’t be hard with all the public trail here”, “you could end up in federal prison”.
Seriously dude, are you having a bad day or something? I just made a post to not even ask about the tax deduction, but rather asking other people who like me edit in Vegas Pro software, what amount would they apply to the kind of work that I did, which then Creative Cow transferred to this forum instead. Then some people here posted their opinions on the tax thing instead, fine, but your post makes you look like a jackass. My only reason for posting was to have an idea of what my services would be valued at. As for the tax issue, I’ll simply go with my information to the IRS and check with them if what I did is tax deductible or not, imagine I’m not going to be all scared of going to jail suddenly because of a moronic post like yours.
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[Sebastian Alvarez] “I just made a post to not even ask about the tax deduction, but rather asking other people who like me edit in Vegas Pro software, what amount would they apply to the kind of work that I did, which then Creative Cow transferred to this forum instead.”
Sebastian,
Your post was moved as you yourself put an “OT” at the front because it was “off topic” for the Vegas forum. These kinds of questions almost always go unanswered on other forums, but they get addressed here.
If you do not like the advice, you don’t have to follow it. If you don’t like the way it was presented, you are entitled to be offended by it. But the fact is, if you live in the United States, you cannot write off your hours.
These people are NOT trying to beat you up and humiliate you, Sebastian. What they ARE trying to do is make you a better business person and one that is aware of things that you are clearly not aware of.
Take it all with a grain of salt, man. If you listen, you will find out what many have found out — that this forum is the “money” forum and those that make it a regular stop in their COW wanderings make more money and have more options than many of those that don’t.
Best regards,
Ron Lindeboom
creativecow.net -
Well, here’s the thing, Ron. I understand and I don’t have a problem with the post being moved here. I also don’t have a problem with the other posters who just offered their point of view on the tax matter, except for this last guy who started saying things like “Fraud”, “…wouldn’t be hard with all the public trail here”, “you could end up in federal prison”. Now that’s very unhelpful, rather out of line and offensive.
[Ron Lindeboom] “These people are NOT trying to beat you up and humiliate you, Sebastian. What they ARE trying to do is make you a better business person and one that is aware of things that you are clearly not aware of.
Take it all with a grain of salt, man. If you listen, you will find out what many have found out — that this forum is the “money” forum and those that make it a regular stop in their COW wanderings make more money and have more options than many of those that don’t.”
Well, so far I haven’t found anything in this thread that would help me start a one man business, since nobody has given me a clue on how much would they charge for the kind of service that I specified. Terence said that he wasn’t going to tell the competition what he gets on specific jobs, but I’m just trying to get an idea on what people charge for these type of things, otherwise I can start by assigning an hourly rate or a quote based on the amount of work that can be either ridiculously low or ridiculously high because I have no clue what people charge for these things, other than a loose notion that weddings are charged $1000 on average, which I got only from a couple of people who paid that themselves. I would think that the idea of a forum on Creative Cow like Business & Marketing would be among other things to shine a little light for those who are beginning and are good with the geeky video stuff but don’t have any notion of business and marketing. Am I wrong?
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Sebastian,
You came here looking for advice on how much to “make up” a bill so you could write is off on your taxes.
You were answered that you can’t do that. Then you said you think you can so would someone give you a price. Am I misstating what I have read from you so far?
If you think I’m being a prick, wait until the IRS knocks at your door.
Terence Curren
http://www.alphadogs.tv
http://www.digitalservicestation.com
Burbank,Ca -
As I stated earlier Sebastian, establish a day rate and charge by the day. Rates vary all over the country and by experience and equipment, so no one can give you exact amounts. However, a day rate between $350 to $550 seems about right for a person who has has not yet established themselves.
David Roth Weiss
Director/Editor
David Weiss Productions, Inc.
Los AngelesPOST-PRODUCTION WITHOUT THE USUAL INSANITY ™
A forum host of Creative COW’s Apple Final Cut Pro, Business & Marketing, and Indie Film & Documentary forums.
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[Terence Curren] “You came here looking for advice on how much to “make up” a bill so you could write is off on your taxes.
You were answered that you can’t do that. Then you said you think you can so would someone give you a price. Am I misstating what I have read from you so far?”
That’s what I would call really twisting my intentions for posting. I donated a service, I was told by the non-profit organization that I work for that I could include that in my taxes as a write off, for which I was even given a form, and since I have no idea how much would I charge for something like what I donated, I came in here asking for that, precisely because I don’t want to either put it a value that is too low, or worse, one that is too high, because that would indeed be fraud.
Somehow you twisted that into making it look that I was trying to commit fraud to the IRS and that this thread could be used as further proof to land me in jail. Do you by any chance work for Fox News? That really seems like the kind of comment Sean Hannity would come up with, taking a grain of dirt and turning it into a mud avalanche.
[Terence Curren] “If you think I’m being a prick, wait until the IRS knocks at your door.”
Now, that seems like quite a prickish comment to me. Pardon me if I just made up a word, but you get my point.
Besides, I was planning on going to the IRS myself to make sure that I include that in my taxes the right way to avoid any further problems. They will either tell me that I can’t, or that I can, and what’s the proper way to do it.
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