Monday, June 30, 2008

Getting Paid to Ride a Motorcycle

top title edit So can you really get paid to ride your motorcycle?

Yes, in a way.

If you publish a blog about your experiences and travels on a motorcycle, and that blog earns income through some way or another, then it's technically a business.

And therefore, any expenses associated with that business, can be written off of your income to reduce your tax liability. That means the gas, the maintenance, the motel, the food, all of it.

However, if you also use that motorcycle for personal reasons, then somehow you'll need to separate the personal from the business. You might argue that your motorcycle blog is about ALL of your motorcycle riding experience. But that's an argument you'll have to make with the IRS auditor.

My recommendation is to examine each ride you take as being a personal ride, or a business ride. Then, keep your receipts on those rides that you determine to be business in nature. Even though your blog represents all of your riding experience, the fact is that the motorcycle is still being used for personal reasons.

What I do is treat the overnight rides as business rides. I'll charge the gas, the food, and the motel all on my corporate AMEX card. I'll treat it the same way another person might treat a business trip to visit a client. But if I take a joy ride on a Saturday, I'll treat it as a personal ride.

I figure that if an IRS auditor wanted to question any of my rides as business or personal, the fact that I have a formula for determining which is which, will demonstrate that I'm not just writing off every ride I take. Just having that policy in place, will help an IRS auditor know that I really did think this through. And I think that's all they're concerned about.

But, if you want to blog about every ride you take, then you certainly are justified in writing off those expenses. But you'll need to be more diligent in keeping your receipts for each ride, and keeping them separate from other rides. You'll also do good by printing out the webpage for each article, and stapling the receipts to it, just to prove that you really did make each ride a business ride.

If you really want to go the full distance in writing off your riding expenses, consider incorporating your blogging business. I did exactly that, and all of my blogs are owned by my company, Clear Digital Media, Inc.

Because I'm technically an employee of the company, I can have my company pay my healthcare insurance, and write that off from my company's tax liability. I can buy my computer, my office furniture, my office supplies, and make them all tax write offs. My cell phone, my landline phone, my Internet connection, are in my company's name, and is a tax write off.

My company gives me the benefit of using that cell phone and Internet for personal reasons.

And since I use one of my spare bedrooms as an office, my business pays me rent. And that rent is written off from my company's tax liability.

The IRS allows small corporations like mine to file a "Status S Exemption", which makes those companies, "S Corps". That basically treats all of your corporate income and expenses as personal. You still get the benefit of having a corporation, but the taxes are rolled up into your personal taxes. So in the end, it actually trims extra money off my personal taxes.

That might sound like I'm getting away with murder, but the government created the "S Corp" specifically to encourage the creation of more small businesses. Businesses hire employees, and I do have employees (aside from myself). That's how I give back to the country for these benefits.

You might think that the only thing I can't write off is the food I eat. Well, believe it or not, I publish some food blogs too.
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