Thread: Curiosity-How do you expense costumes on your taxes...

The tax preparer in me is curious, do you write them off in one year, depreciate them over their useful life, or something else? What does your accountant do? Do you report them when you sell them?

I'm also wondering about this! I'll be watching because I need to figure this out too.

Oh I didn't think to do costumes as a tax write off! I've gotta get a tax guy/gal.

I tend to buy and sell a lot of used costumes. The majority of them I keep less than a year; it's only the rare and special one that I'll keep for eons.

So I've expensed mine and credited back against that same account when I sell one. I don't use an accountant, though, and have never been audited so there's no outside confirmation that what I'm doing is 'right.'

Personally, I would keep track of all bought and sold with backup, and record the expense and sale of them during the year on your taxes. For the dancers I've done taxes for, I've noticed people usually claim the purchase, but not the sale on their taxes. This is a big no-no.

Usually, you depreciate assets or item of higher value over their useful life. For example, a laptop would be 3-5 years. However, with costumes I would assume high turnover and an accounting mess for some dancers with recapturing depreciation on items sold the following year.

For individuals, dancers are cash basis. What you spend and take in should be included.

Anyone else want to chime in?

So you would report the sale of a costume as "income"?

Originally Posted by andalee-oriental

So you would report the sale of a costume as "income"?

Yes, this is my understanding.

Is it better to write off the whole thing when you buy it or depreciate the value over x amount of years?

Depends on your situation and costume expense and how long you plan on, I can't make that call.

I got a few pm's-I do do taxes but only through my firm. I don't have time to freelance :)