USA Witchcraft Reminder
(probably applies elsewhere)
If you made money from your witchcraft in 2023, you may need to declare it on your taxes!
Now, I know this is tumblr and people seldom make enough to shift them into another tax bracket, but this is something you need to think about (and perhaps talk with a tax professional) if you use witchcraft as part of your income.
Professional Witch reporting for duty with U.S. tax tips!
If you made enough to declare it on your taxes, even if it doesn't change your income bracket, it may result in a smaller return or a bill for unpaid sales tax. (Had to deal with this last year, it wasn't fun.) You'll likely receive a 1099 tax form from whatever service you use for transactions if you made enough to qualify.
To help offset possible charges, you can and SHOULD declare any expenses related to your business on your tax return. And yes, this works even if you're a single-person operation without an Inc or an LLC or a brick-and-mortar retail space.
Here are some examples of things you can deduct:
Supplies - If you deal in physical items, you probably had to order stock or supplies. Anything that relates directly to your merch or your operation is fair game, whether you shipped it to yourself or directly to a customer. (See Also: Postage and Mailing Expenses)
Equipment - If you had to purchase things to assist with your creation process, your retail space, or live events, these can be deducted. Table, chairs, and canopy for a summer fair? Deductible. New computer or specialized equipment for the business? Deductible.
Postage and Mailing Expenses - If you ship your wares anywhere, any costs for postage, packing materials, or PO box rental qualify as deductible.
Hosting Fees and Marketing - If you pay for website hosting or buy adspace or contract someone to create a site or a logo for your business, all of that is deductible.
Event Fees - If you attended any live events, you can deduct your table fee or space rental payment, the fuel you used to get to the venue, any tolls incurred on the road, parking fees, and any meals you purchased on the day. This also applies to any fees associated with vending at virtual events.
Rent/Mortgage and Utilities - Yes, you read that right. If you have a home office or dedicated workspace, you can deduct a portion of your monthly rent or mortgage and a portion of your internet and electricity bills. If you use your phone for your business, even if it's just for app purposes, you can deduct a portion of that bill too. You'll need to calculate the total square footage of your home and the room you use for your workspace. Find the percentage of the overall space that room takes up and that's the portion you can deduct from those bills.
To put it more simply, let's say I have a 1000 sq ft apartment and I use a 10x10 room for my workspace. That room is 100 sq ft, which is 10% of the overall space. So I can deduct an amount equal to 10% of my total rent, electricity, cable, and phone bills for the year for having a home office. (It's worth noting that if you own a home, you can deduct the interest from your mortgage too.)
Professional Service Fees - If your business requires the services of a professional (i.e. contractor, consultant, repair tech, financial advisor, legal counsel, tax preparation, etc.), any fees directly associated with your business or workspace may be deductible. Double-check on this if you're not sure whether the services rendered qualify as deductible.
In conclusion, SAVE YOUR RECEIPTS! If you're not already keeping a record of your sales and expenses, start doing it NOW and do as much retroactive recordkeeping as possible. Trust me, it will save you so many headaches.
Good luck, witches!
