Why I asked the question

[dsbbreck 0]

In reference to this other thread.

http://www.dropzone.com/cgi-bin/forum/gforum.cgi?post=886648;sb=post_latest_reply;so=ASC;forum_view=forum_view_collapsed;;page=unread#unread

Here is why I asked the question.

Scenario,

Let's say hypothetically that I work as a videographer at a dropzone. They pay me $40 per jump. Out of that $40 I have to pay a packer $5 to pack my rig because the dropzone keeps me so busy that I don't have time to pack for myself.

Now the dropzone sends me a 1099 every year stating I made that $40, but I paid the packer $5 Cash. They are not going to give me a receipt. Now I can still write it off as an expense, but without a receipt I'm taking my chances.

Maybe I should just start writing my packers a check.

Edited for spelling, but I probably didn't catch them all.

David

"Socrates wasn't killed because he had the answer.......he was killed because he asked the question."

[benny 0]

the truth of the matter is that it depends on how much the DZ reports in that 1099 as to whether or not you run the risk of an audit.

Never go to a DZ strip show.

[SkymonkeyONE 4]

If you are working and getting a 1099 and are paying taxes, then you need to be writing off all your packing as a business expense.

[jdthomas 0]

Dude

You have to get a big ol fat folder and fill that thing with every recipt that you can get when you are going to get a 1099.. gas, car miles, fun jumps become training jumps, buying film, cameras and all that stuff becomes part of the business.

Now you get all these great breaks, you have to keep thouse pain in the ass records for years after you claim them..

Pay your packer a check and keep the record!

www.greenboxphotography.com

[mjosparky 4]

Quote

the truth of the matter is that it depends on how much the DZ reports in that 1099 as to whether or not you run the risk of an audit.

Benny, Benny. It's not how much is on your 1099 that will flag an audit, but what and how much you list on your Schedule C, Profit or loss from Business. They don't care how much you make, but how much you deduct.
Sparky

My idea of a fair fight is clubbing baby seals

[swooop 0]

Hi, David,

I do bookkeeping and taxes for a living. If you work as a subcontractor, you will be using Schedule C (not D) for your business. Like the last posts, you definitely need to keep track of all your receipts for all your expenses that are related to your "business" as a videographer. Remember you are taxed on your Net Profit, which is Income (1099) minus Expenses.

If you pay cash for your packing, than you do need a receipt for proof. An alternative to a normal receipt would be a daily packing log. The packing log can be simple binder, notebook, or a ledger with columns in which you will record the date, location (DZ name), packer's name, number of packjobs, the total paid, and the last column will be your balance (YTD year-to-date). Check and credit card transactions are ideal ofcourse because of the paper proof, but a good maintained log is considered sufficient for IRS purposes. The only problem that could come up is if the DZ or the packers say that you were not physically there on the dates that you record !

I have a lot of experience working with small businesses and independant contractors. So if you have more questions or need advice, please feel free to contact me (post, PM, or e-mail).

Blue Skies Always,
Gwen

"There are no ordinary moments"

[rehmwa 2]

Swoop has it.

Keep a log. Even ask the packer to sign off on it each day. If they don't, take your business to someone else.

...
Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants

[boxingrrl 0]

Great idea! Thank you for the suggestion. We're so lucky to have folks from all walks and professions who are able to share their wisdom with us. It's awesome.

[jb092 0]

I fly tandem vids at Cross Keys, PJ, Who runs the packing mat, only wants payment when I am paid. He also gives a printed invoice. Since I pay him with a check my accountant takes it and writes it off as an expense. Thats just the way we do it.

What could possibly go wrong?

[mjosparky 4]

Thanks for catching that, typo, change made.
Sparky

My idea of a fair fight is clubbing baby seals

[dsbbreck 0]

I really like that log book Idea.....but.....

At our DZ, the packers who pack for the Video guys are also the ones packing Tandems and Student rigs for the DZ. With that said, what I'd really like to see happen.....which is going to piss off the packers....is that instead of paying the Video guys $40 for a jump they pay us $35 a jump and then they pay the packer $5. And if I should pack my own rig, the DZ pays me the $5 as a packer.

It's really no different then the tandem situation. The DZ pays us $30 a jump and the packer $10.

That way everyone is taxed properly.

David

"Socrates wasn't killed because he had the answer.......he was killed because he asked the question."

[flyangel2 2]

Quote

which is going to piss off the packers....is that instead of paying the Video guys $40 for a jump they pay us $35 a jump and then they pay the packer $5.

Sorry Dave, I don't agree with that answer. Packers work hard for their money. I know you work hard too, as well as everyone else at the DZ.
Why should the packer take it in the shorts having to pay more taxes? You get paid $40, you get taxed on the money. How you choice to spend it is up to you. You don't have to have a packer, just learn to pack faster
Plus after having been an office worker at your DZ, I know the problems that can arise at the end of the day when the claim sheets are turned in at the end of the day. Heck, it's hard enough to keep track of who did what, and then have to go back into the Manifest Computer and change what each video person was paid. All that just so a few people don't have to pay taxes on the money that they earned. If the DZ is going to go by the book, then go by the book.

May your trails be crooked, winding, lonesome, dangerous, leading to the most amazing view. May your mountains rise into and above the clouds. - Edward Abbey

[PhreeZone 20]

>If the DZ is going to go by the book, then go by the book.

Then the packers should be claiming all their income too. I know of packers that don't file 1099's since they operate as a cash business... If they want to play by the book then they should pay taxes on that too.

Yesterday is history
And tomorrow is a mystery

Parachutemanuals.com

[flyangel2 2]

Quote

Then the packers should be claiming all their income too. I know of packers that don't file 1099's since they operate as a cash business... If they want to play by the book then they should pay taxes on that too.

Yes, Eric, you are right. If they are going by the book, then go by the book. If they write a rec. for the video people and they don't claim it, then they need to answer to the tax man if he comes knocking and ask questions.

May your trails be crooked, winding, lonesome, dangerous, leading to the most amazing view. May your mountains rise into and above the clouds. - Edward Abbey

[GroundZero 0]

Quote

At our DZ, the packers who pack for the Video guys are also the ones packing Tandems and Student rigs for the DZ. With that said, what I'd really like to see happen.....which is going to piss off the packers....is that instead of paying the Video guys $40 for a jump they pay us $35 a jump and then they pay the packer $5. And if I should pack my own rig, the DZ pays me the $5 as a packer.

Then you would be an "employee"... let's send some of your's to uncle sugar... you have expenses as a business person... use them.

Chris

Y

[dsbbreck 0]

The problem is this. I know it's hard to understand, but at our DZ on the weekends, it's so busy that you don't have time to pack for yourself no matter how fast you pack. Most of the time you get down, grab your second rig and get back on the plane. You don't even have time to edit the video for the customer until the end of the day.

So paying for a packer is just the way it is. If you don't have two rigs and hire a packer, there someone else waiting to take your slot and your out of a job.

As a videographer, I'm not allowed to do freelance video, but the packers are allowed to freelance packing. That's not fair. So to make things more fair, make the video packing not freelance and make and the packers report their income just like the instructors and videographers have to.

You see we use to be able to pay the packers from off of our accounts, therefor it wasn't income to us unless we took a check from our account. That has all changed. Now they report everything we make.

David

"Socrates wasn't killed because he had the answer.......he was killed because he asked the question."

[swooop 0]

Like flyangel2, I have worked as an office manager and bookkeeper at a DZ, and I know the difficulties of keeping track of everything at the end of the day. A DZ has the responsibility of paying for the packing of the Tandem and Student rigs because they own the rigs, and therefore, it is a necessary expense for their business. Video guys and AFF instructors are solely responsible for the packing & maintenance of their own rigs.

If the DZ paid for your packing, it would still be considered income to you because the DZ does not own your rig. You therefore will still be taxed on the full $40 for video jump, and would not be able to expense out (deduct) the $5 for the packjob. It really does not make sense for the DZ to pay you to pack your own rig. Please know that I really do understand your logic, but the fact that it is your personal rig is the reason behind the bookkeeping of the DZ.

A DZ needs to stay inline with taxes & rules & such in order to keep their business rolling, just like you do. You truly cannot control how a DZ handles its books or operation. (And packers are responsible for their own stuff too.) The only thing you can control is your own Video Business. The fact that you are questioning & researching for solutions is great! Please keep it up - it will definitely help your business grow!

Here's a little more advice. Remember to always record all your expenses. For the packing expenses, either keep a good log or have the packer give you a printed Invoice. Both jb092 in the above post and Keith Larrett (Visual Expressions) always made sure that they got a printed Invoice from their packer. Also rehmwa idea of having the packer sign the log is a good idea. You can either have the packer sign each day, or sign a generic form stating that he/she certifies that he/she has packed for you on the dates recorded in your log.

You are taxed on NET PROFIT on Schedule C, which is INCOME minus EXPENSES. If it is a valid expense, dude, record it!! That means video tapes, film, tools & stuff for your helmet & jumpsuit, office supplies, shipping charges, non-video jumps are your training jumps (be reasonable though!), USPA dues, etc.

Take care, and stay true to you & your dreams!
Blue Skies Always

"There are no ordinary moments"

[riddler 0]

Quote

Yes, Eric, you are right. If they are going by the book, then go by the book. If they write a rec. for the video people and they don't claim it, then they need to answer to the tax man if he comes knocking and ask questions.

I agree with this - there's no excuse for submitting some employees for tax purposes, but not others.

Trapped on the surface of a sphere. XKCD

[mjosparky 4]

Quote

As a videographer, I'm not allowed to do freelance video, but the packers are allowed to freelance packing.

If you are not allowed to freelance, you are not an independent contractor, you are an employee. If the IRS comes looking they will be pissed. The way it was explained to me, if they can tell you what to do and when to do it you are an employee.
Sparky

My idea of a fair fight is clubbing baby seals

[dsbbreck 0]

Quote

If you are not allowed to freelance, you are not an independent contractor, you are an employee. If the IRS comes looking they will be pissed. The way it was explained to me, if they can tell you what to do and when to do it you are an employee.
Sparky

I am allowed to freelance at other DZ's, but since the dropzone runs the video concession, I just can't go out and say, "hey do you want a video" and then charge what I want.

We don't have a packing concession at our dropzone, but the packers that work for the dropzone packing tandems and student rigs are allowed to freelance experienced jumers rigs.

This thread was just intended to see how other dropzones handle similar issues. I'm sure in the end we will just keep a log for tax purposes.

Thanks all for your input.

David

"Socrates wasn't killed because he had the answer.......he was killed because he asked the question."