johnathandoe
Junior Member
What is the name of your state? CALIFORNIA
As a self-proprietor, I organized an event where $2000 was included in our budget to give to a non-profit organization. Whether the event made a profit/loss, the non-profit group was going to receive the money.
The non-profit was very much involved in the event planning and execution. It was never **explicitly** said that they would receive $2000 for their work, but they KNEW that they would receive some amount of money. Had they been told they would receive no money at all, they would not have been involved in the event at all. We had regarded this as a donation--but it could very well have been a "payment" as well.
There are tax implications here, though, over what we call that $2000. If it's considered a "donation", then I can claim a deduction on Form 1040, but on Schedule SE, I would be taxed (self emplyment tax) on that $2000. However, if the $2000 is considered a "commission/fee" to the non-profit, then I can consider it an expense on Schedule C, and I would not have to pay taxes on the $2000 on Schedule SE.
In sum, the $2000 was never mine to begin with. Everyone on the event committee decided that $2000 would automatically go to the non-profit group. I talked to a tax accountant who said this was clearly a business/operating expense that I incurred, so it can be itemized as a "commission/fee" on Schedule C. Just want to get a second opinion before I file my return.
Thanks.
As a self-proprietor, I organized an event where $2000 was included in our budget to give to a non-profit organization. Whether the event made a profit/loss, the non-profit group was going to receive the money.
The non-profit was very much involved in the event planning and execution. It was never **explicitly** said that they would receive $2000 for their work, but they KNEW that they would receive some amount of money. Had they been told they would receive no money at all, they would not have been involved in the event at all. We had regarded this as a donation--but it could very well have been a "payment" as well.
There are tax implications here, though, over what we call that $2000. If it's considered a "donation", then I can claim a deduction on Form 1040, but on Schedule SE, I would be taxed (self emplyment tax) on that $2000. However, if the $2000 is considered a "commission/fee" to the non-profit, then I can consider it an expense on Schedule C, and I would not have to pay taxes on the $2000 on Schedule SE.
In sum, the $2000 was never mine to begin with. Everyone on the event committee decided that $2000 would automatically go to the non-profit group. I talked to a tax accountant who said this was clearly a business/operating expense that I incurred, so it can be itemized as a "commission/fee" on Schedule C. Just want to get a second opinion before I file my return.
Thanks.