We're expecting about 2-feet of snow here in the People's Republic of Maryland during the next day and a half. Because of the forecast, two locations called and cancelled, for which I'm glad. (I hate winter and DO NOT DRIVE IN SNOW!)

Now, this is a question for all you tax gurus. Since they cancelled the jobs, can I write off the monetary losses caused by the cancellations due to weather conditions? So far I have not been able to determine via my tax program whether or not this can be done. I'll continue to search the IRS codes and see what I can find, but if someone has an answer and can point me in the right direction for the IRS codes, I would love to see it. Could be a substantial tax savings.

Cheers,

Gary

From my understanding, if $$ comes out of your pocket, you can write it off.

You cannot write off $$ that doesn't come into your pocket.

That's just the downside of being self-employed.

Beakybird

Sorry Gary....but Beakybird is right. I can't cite the ruling, but I know from previous business experience the IRS doesn't consider anything a loss until if comes OUT of your pocket.
Eddie

I wonder if the taxman considers what they "take out of your packet" a loss. Nah!

Maybe what you need to consider is a written contract that has a cancellation rider on it.

Something to the effect that if either party cancels within a certain timeframe before the contract date that half is still owed to the performer. Or whatever deal you think is worth it.

There are plenty of examples of music performance contracts to peruse if you websearch.

Ever since I put that rider in there, it is amazing how GOOD the worst of weather has become to these folks...

Mac,

They are contracted jobs, and I have the option to cancel for bad weather. However, so do the folks that contracted me to do the job. That's not the point, though. I just want to be able to deduct the loss from my income tax if I can legally do it. That's why I was asking if someone knew the exact IRS code that either allowed, or disallowed the deduction.

Cheers,

Gary

I can't find any IRS codes related to cancelled jobs. However, consider this: If a waitress normally works a 40 hour week and the boss tells her he doesn't need her for the full 40 hours, she takes the hit. There is no provision for her to claim a deduction for hours not worked...or tips not received.

If she donates 7 hours of her time for IRS recognized charities, she can claim a deduction in income from the wages and tips she would have received...but she has to work the time in order to claim the deduction.

Eddie

That's true, Eddie, but she isn't self employed.

Gary

I'm looking at it this way ... income tax is tax paid on INCOME ... if you have no income, you pay no income tax ...
what would you categorize the loss under on a tax form? - I realize that is your question, Gary, so I guess I am partially answering it with another question ...
loss of wages is something you can get insurance against, but I don't know if it would cover the loss of a gig or two ...
t.

There's the write off: You don't pay taxes on the income you didn't make. But you still have to pay taxes on the income that you did make.

And yeah, if you're self-employed, you do deduct your self-employment taxes - small help.

Beakybird