This Spring's Special Tax Tip... How to Deduct Having Fun!
Today is the start of the first day of the 2012 Shell Houston Open played at Redstone Golf Club. The "SHO" as it is referred to, is an annual PGA Tour event that raises millions of dollars for charities. It is held the week before The Masters golf tournament that is arguably the biggest golf tournament of them all. Thousands of golf fans attend the SHO but few of them know that their business can actually deduct 100% of the cost of the ticket on their tax return.
How can you do that when entertainment deduction is limited to 50% of the cost?
The SHO is what is referred to as a qualified charity event. A qualified charity event must be
- A sporting event
- Gives all its net proceeds to 501 (c) (3) charities
- And uses volunteers for substantially all the work performed in carrying out the event.
A sporting event can be a tennis tournament, fishing tournament, skeet shooting, archery contests, triathlons, marathons, and hunting contests. As long as it meets the requirements above, you can deduct your ticket costs.
Can I deduct other costs of attendance?
You bet! Here is how you do it. You take a customer to the tournament and have breakfast with them. You discuss business opportunities and document your discussion. Then you can deduct 100% of the days costs at the golf tournament including drinks, meals. If you play in the Pro Am you can deduct the entry fee you pay 100%.
The final four is in New Orleans, can I deduct going to those games?
Ha-ha...nice try...but no. These games are excluded because they generally do not satisfy the requirement that substantially all of the work be performed by volunteers. Schools that pay their staff to coach and recruit are excluded from the classification of a qualified charity.
So Go Raise Money and Have Fun.
Go to your favorite charities fund raising sports event and deduct the entry fee. Take a customer or business associate and deduct all of your expenses by having a brief business discussion (that you document). Who knows, you may stumble on a business idea that will allow you to make you a fortune. But at the very least, you are helping a worthy cause.
Tax Season in High Gear
Our tax season is in high gear. I am meeting with my old childhood best friend who is also a client and we are going to the SHO. Then Sunday I will be on the final push to April 17th.
If you have any friends who need any accounting expertise, please send them our way! We love new business, even in the middle of tax season.