Each week Mom On Dealz brings us a answer to an accounting question! Here is this weeks Ask An Accountant!
Although tax season is over, tax questions arise year round. My husband is an experienced accountant and will be answering questions sent to me at firstname.lastname@example.org with the subject line “Ask an Accountant”. See previous questions and answers HERE.
I am a blogger and frequently attend conferences. I accept sponsorship from companies for these conferences. How would these sponsorships be taxed?
The sponsorship would be recorded as ‘Other Income’ and the costs related to the conference would be an written off as an expense. If the amount of the sponsorship and the amount of the conference were equal, there would be no taxable profit from the transaction. If the sponsorship did not cover the total expenses of the trip, there would be a net loss on the transaction. If the sponsorship exceeded the expenses of the trip the difference would be ordinary income(profit) and included in the Net Profit of the business, thus taxed at the appropriate income tax rate
*Please keep in mind this post is for informational purposes only and answers given are very general. Many things depend on individual circumstances. Please contact your personal accountant or financial advisor for your particular situation.