I'm trying to figure out if it would be worth while to keep my records for study materials, travel, etc, etc to deduct on next year's taxes. Does anyone have experience with this? Are there things that I couldn't deduct? Thank you in advance for your feedback!
You should check out Matt Stamp's guide here.
However, the big change in the tax law this year may make it not worth your time. With the standard deduction now being double what it used to be, you need a lot of itemised deductions to get a bigger number to deduct. I would say (without knowing your situation) that if you do not own a house and thus have the interest and property tax deductions from that, you may not be able to have more in itemised dedutcions than the standard.
I save receipts for books on f&b, bottles I buy under $50, dry-cleaning, and any class-related expenditures. Even your subscription to guildsomm fits here.
Jim, looks you linked a spreadsheet in your Dropbox instead of Matt's guide.
Thanks Jeremy! Truly idiotic... don't know how that happened. Hopefully this one is the actual article.
If you have your own side business as a consultant, then you can deduct all of those things on top of the standard deduction. You do have to show some income for your business, but if you are operating at a loss for a couple of years I believe that is fine. I think you have to show a profit by the third year otherwise it is deemed a hobby by the IRS. (Full disclosure, I'm not an accountant.)
A sole proprietorship should show a profit in three of the first five years to defend the status as a business with the IRS.
If you plan on earning money from consulting, I would highly recommend tracking your expenses and working with a tax accountant. If you don’t, under the new tax rules I personally wouldn’t bother unless you have a fairly unique situation.
I would check with your tax accountant here. Dry cleaning is never a write off expense unless it is a uniform, and they are pretty strict about what defines a uniform. Also, as of 2018 unreimbursed employee costs can no longer be written off.
If you do not have your own business, but work in the industry, can you still deduct things like the MS exam and tasting bottles? I did buy a house this year and have a meeting with a new tax accountant next week, but I am wondering if I am wasting my time trying to collect wine related receipts. I know lots of people that write off bottles and exams regularly, but I am also not sure if they are doing so legally.
Thanks Geoff, black vests supplied by work is generally what I have done since those pick up oils so easily. Did not know that update about employee costs!
Probably not. You need business income (non-W2) to write it off against. Unreimbursed employee costs can no longer be written off. I would highly advise anyone who itemizes deductions to see a tax professional—especially after the 2017 tax law changes.
Even as such, unreimbursed employee costs can no longer be written off; you need non-W2 income to expense it against.
Thank you to everyone who replied, at this time it doesn't seem worth while to keep track of my expenses. I appreciate everyone's insight!
It is possible that itemization could still be a benefit for state income taxes if applicable where you live.