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Our Tax write offs!

A forum for people who are new to commercial fishing and for talking about the fundamental rules and regulations.

Our Tax write offs!

Postby Robot » Fri Jan 19, 2018 7:15 pm

So, its Tax time(weird but, I really like taxes!!) I'm fairly new to the trolling game. Also fairly new to being a sole proprietor. What are the some of the things we can claim as taxable deductions?!

One thing I try to mention to everyone that is a commercial fisherman(and I'm not sure if this applies to deckhands, someone clarify?)
A Per Diem! As commercial fishermen we are able to claim X dollars per day as a tax write off wether we spend it or not(its a dollar amount 'per day' that changes from year to year) I think last year it was around $70 per day(a day being 24 hrs at sea or away from 'home) so: 100 days away from home = a tax deduction of $7000. Basic math. That's even if you don't spend anything! pretty neat. there is so much more to this than I am explaining but you get the basic idea. Ask your tax person about it! It might help you out. if not, it didn't hurt!

Anything else fun out there? Who is the best Tax guy for our Business??

Cheers!
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Re: Our Tax write offs!

Postby Salty » Fri Jan 19, 2018 7:37 pm

Dapcevich accounting in Sitka.
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Re: Our Tax write offs!

Postby temerson » Sun Jan 21, 2018 10:11 pm

Per Diem is an alternate substantiation method for your personal meals and entertainment expense while traveling away from your tax home...You can either deduct your actual expenses incurred or use the per diem method in lieu of actual receipts. You will want to track your actual meal costs for your crew/yourself separately, or come up with a reasonable allocation at the end of the year I.e. 50/50 for two guys if your crew was aboard all season. You can claim per diem for yourself and the actual expenses incurred for your crew grub. Crew is entitled to use per diem themselves if they too are traveling away from their tax home and incurred expenses for meals. If they don't incur any costs for meals than they are not entitled to per diem. Basically they need to have at least bought a burger or something somewhere and saved the receipt if they ever need to prove that they did indeed incur an expense for meals.

It is important to remember that the figure you quote is then reduced by 50% - as is the case with all deductions for meals and entertainment. You only get a .50 deduction for a dollar spent.

To be noted, you are only entitled to this deduction when you are traveling away from your tax home. Although as a matter of course most fisherman probably take it, there is always the possibility under audit of your tax home being ruled as the boat and this deduction being completely disallowed. The IRS has a pretty good resource page for fishermen that explains this... https://www.irs.gov/businesses/small-bu ... deductions.

Anything ordinary and necessary in conducting our business is a deduction... You will be filing a Schedule C... Profit and loss for business. You will tell them how much income you earned and what expenses you incurred in producing that income. Anything you purchase that you needed to produce the income is a deduction. Pretty straight forward. Per diem is a nice gimme if you qualify so you don't have to be as careful about keeping every grocery or receipt from the burger joint. Don't forget to claim depreciation on boat and amortization on permit as well.
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