Extreme Taxation
I have the same thought every year when I get to line 37 on my 1040 tax form (adjusted gross income) — I need a new job. Ski Mountaineering has its ups and downs (haha..) but it is not a career you get into for the money. I started my “business” about ten years ago when I published The Chuting Gallery and at times, the financing of it is far more extreme than the actual skiing. The first year I was in business I only kept track of my sales and not my expenses, which was a rude shock when it came time to pay self-employment taxes.
I’d say I’ve come a long ways since then, but I really haven’t. My one formal meeting with a CPA took place midweek on a chairlift at Alta (midweek is a good time to meet doctors, lawyers and CPA’s at ski areas). He summed it up something like this “So, you have a fun job that requires lots of expensive toys and travel, you don’t make much money and you want to write the whole thing off on your taxes, right?” Pretty much. He then went on to explain how this was very similar to being a photographer where you buy expensive camera gear, go on a trip, shoot tons of photos, and may not sell a single image, or perhaps sell them years later. For such a fun job, there is a lot of blind faith involved, and from a tax standpoint, what makes the difference is if it is a hobby or a career.
Skis, boots, poles, skins and a business card that says "Ski Mountaineer." Now it is a career, not a hobby.
Part of the downfall (haha…) of ski mountaineering is that it is such a small market that there just aren’t a lot of options for selling photos, stories or books. As far as trips go, if you can sell enough photos and stories to break even on expenses, that is a wildly successful outing. Most of the time it is a losing proposition, which is why sponsors are so important, although I think of them more as “lifestyle enablers.”
The taxation crux of all of this is deciding what are legitimate business expenses that allow me to perform my job. I couldn’t survive in my office of choice without a titanium spork, Lexan coffee press, Leatherman Skeletool and beacon, so those fall under “Office Supplies.” A celebratory outing at the Bush Company where future skiing plans are laid qualifies as “Meals & Entertainment.” The really tricky ones (from a moral standpoint) are the big fixed assets. Dentists need expensive drills and X-ray machines, whereas Ski Mountaineers need expensive kites and helmet cams, right?
A flying fixed asset with a three year depreciation schedule being put to work on the Bagley Icefield.
That’s my story and I’m sticking with it. I figure all of my tent time will have me well prepared if I get thrown in jail.
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Category: Commentary
Can we assume there will be a blanket invitation posted here to the post-audit gear sale?
I wonder if we wear the same size boots.
If the Point of the Mountain Correctional Facility has WiFi, I’ll put it up on eBay. :) Besides, it’s all that junky AT stuff – nothing you’d want.
Is there any way you can employ the dogs? Like, head of security (Brook) and vice president of naps (Big G)?
Having employees might give you some breaks….but then, it might be hard to get them SS numbers….
We just call it PLT…Pro Leisure Tour, not a career.
You must be doing something right to have income to offset. None of my hobbies seem to have any revenue associated with them.
I spent two summers being a pyrotechnician and fire performer, and the corresponding winters being a ski instructor. It was an odd tax season after that one. I’m still somewhat surprised that I didn’t get an audit for those, as I ended up with a sum loss of a few grand those years.
As my brother the photographer said, “My life is a tax deduction”
What a great post! I go through this every year, or least have been for the past three when I decided to “start” my own photography business. My only saving grace is I make just enough doing internet marketing work to offset the um, large loss I take from photography. Oh wait, it also helps to file jointly with a very lovely and understanding wife who makes a lot more than me…
You guys have nothing to worry about. As a CPA (don’t laugh, it pays the bills) I’ve seen just about everything. The folks who should really worry are the ‘smokers’. Those young ‘goatees’ pull up to the trail heads with $100,000++ invested in gear; trucks/trailers/snowmachines plastered with “advertising” (‘Dip-Shit Sheetrock, LLP’) then claim the whole rig as a business expenses. Yeah, riiight?!
Andrew, and the rest, 5-10 grand in ski/camera gear is nothing.
I saw that your kiting photo is from the Bagley Icefield. I’ll be working in Wrangell-St. Elias NP this summer. Any suggestions on where to ski without the aid of aircraft, watercraft, or week-long trek? Thompson Pass looks good, but I’m not sure how late in the season it’s any good.
Andrew
I would give anything to have a business card with that title! Im sure that it is a major American Dream for many.
Good Job!
Hi OMR – thanks for the words of reassurance. Then again… I probably don’t need any more encouragement. :) I wonder if there is skiing at Gitmo?
Hi Patricio – The Wrangell-St.Elias range is so huge that it is pretty hard to do anything (at least that I know of) as a quick day trip. Thompson Pass is physically close, but in a typical Alaskan way, you can’t get there from here, without a plane or a long drive-around. White Pass supposedly has excellent kiting. Summer might be a bit late for snow, but then again, it is Alaska, so there’s always snow, but more a matter of how to get to it.
That place is a blast! You will have a good time up there.
Careful about getting advice from a CPA that you met mid-week on a ski lift. Ski season is busy season — isn’t that guy supposed to be in the office crunching numbers?!
That’s why I quit public accounting – I had to work too many Saturdays during ski season…. I can’t let work get in the way of my life!
My dream ‘business card’ reads “Ski bum”… well a guy can dream, until then I gotta keep my day job :)
Andrew, if you get a bill from OMR, it is deductible.
To Sara, ya, it’s hard to explain the lunch hour board meeting during tax season. But it’s nothing compared to explaining the ski expedition to Everest that entails departing in late March, ha.
Mike Marolt CPA