Tax deductions are generally limited to expenses which a taxpayer incurs during the production of income, although some personal expenses are deductible. Congress and the Internal Revenue Service limit these to items that encourage specific types of behavior such as saving for retirement or purchasing health insurance. For some people, hunting is an activity which produces a revenue stream and therefore has specific expenses which may be written off. However, there are limitations.
There are two types of tax deductions: above-the-line and below-the-line, where the line is the taxpayer's adjusted gross income and found on line 37 of Form 1040. Most above-the-line deductions relate to activities that produce income and business expenses, but there are a few personal expenses included. Below-the-line deductions, for which there are only six categories, are applicable to personal expenses and losses. None of these categories holds relevance to a hunting trip. However, in some cases, a hunting trip for purposes of business may have applicable deductions.
Ordinary, Necessary and Reasonable Expenses
In order for a business expense to qualify as deductible, it must meet the criteria of ordinary, necessary and reasonable. Ordinary means that the person or business incurs it in the normal course of business. A good test for this qualification is checking to see if others in the same line of business incur similar expenses. In order to qualify as necessary, the expense must be one that a "prudent" businessperson would also incur while conducting business. To meet the final qualification of reasonable, the expense cannot be excessive and must contribute to the generation of income in some way.
Hunting Trip to Produce Income
For some, taking a hunting trip is not merely an activity for purposes of entertainment. There are businesses which use hunting trips in order to collect meat to sell to others or to produce videos or write articles, all of which generate income. Many companies which make hunting merchandise also supply footage of hunts in order to promote the items that they sell. These videos are also available to purchase by consumers. Writers often try out different products in order to write a review. In these cases, some of the expenses may be written off.
When a taxpayer must travel to a location outside of his normal "tax home," he may deduct expenses related to transportation, meals, lodging and some communication. The taxpayer's tax home is the area in which he works for the majority of the work week, even if he does not reside there. Transportation is limited to the greater of actual expenses or a standard mileage rate of 51 cents per mile in 2011 (if the person is using his own vehicle). A taxpayer may usually only deduct 50 percent of his meal expenses, as well.
Some of the equipment that a hunter uses during her hunting trip, if it is part of her business, may be depreciable property. Items that only have a useful life of one year or less may be expenses. The required hunting license is generally a tax deductible expense as well.
If hunting is a hobby which produces a limited amount of income for a taxpayer, he may still deduct some of the expenses applicable to a hunting trip. The tax deductions are limited to the amount of income that he produces during the tax year, however.
- "Income Tax Planning for Financial Planners"; Thomas Landgon, et al; 2011
- IRS.gov: Topic 511, Business Travel Expenses
- IRS.gov: Topic 512, Business Entertainment Expenses
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