Whether you work in the movie business, use movies to entertain business clients or support charities through ticket purchases, it is very likely you can claim movie tickets as a business expense, even if there is no tax on movie tickets. Since movies are widely viewed as a form of personal entertainment, it is imperative to be thorough with your record-keeping to support your claims. Make sure you are claiming movie tickets for the right reasons to pass inspection when you file.
The IRS allows for business deductions that are considered ordinary and necessary for your type of business. This means it may be possible for you to deduct those movie tickets come tax time.
Business Expenses Defined
A business expense is a cost that is incurred while a business is operating. This could mean the amount spent on advertising to new customers, or money spent on potential clients to attempt to gain their business. If movie tickets are part of the cost of doing business, then at least a portion of the expense can be claimed as a business expense. But how the tickets and used and the reason for them comes into play.
When entertaining a client for business reasons, from rounds of golf to movie tickets, you can deduct half your entertainment expenses. However, there are a few things you should do to support your deduction claim so you do not run afoul of the IRS. Keep timely track of your entertainment expenses. Keep a journal, diary or calendar updated with the following information: who was present, where the theater is located, when it happened, why the meeting was important and how much it cost. If you do not record this information immediately, you may not be able to deduct the movie tickets. Any expense over $75 requires keeping a receipt.
General Work-Related Education
Expenses you incur to maintain or improve your skills for your job are deductible, according to the IRS. That means if you are a history teacher, tickets for a documentary movie with new, related information about a historical event is deductible because you are watching it to maintain or improve your professional knowledge. However, education expenses for a new job are not deductible. The movie has to be related to your current job for you to claim it. Keep detailed records concerning the time, place and importance of the film to support your claim.
If your movie tickets are part of a charitable donation, you may be able to claim a deduction. The fine print on this example is that you can deduct only what you spend beyond the fair market price of the ticket. For instance, if at a fundraiser you purchase movie tickets for $100 that would typically cost $30, your charitable contribution is $70. That $70 is deductible. Benefits for film-funding charities sometimes offer overpriced tickets to a screening to raise money for students and grants. If you support an institution in this manner, the amount you spend that is over the fair market value of the entertainment you receive is considered a deductible expense.
Film Industry Professionals
Simply because you work in movies doesn't mean that every movie you see will be considered a business expense by the IRS. In fact, if you attempt to deduct every movie you see, that will raise a red flag. The most important element of claiming movie tickets as a business expense as a film professional or claiming tax deductions for entertainment industry professionals is keeping thorough records and receipts that explain the business need to see each film. Whether you are an actor, technician, writer, director or producer, make claiming a movie ticket easier on yourself by keeping the receipt and the ticket stapled together, along with an explanation of why this particular film was a business requirement.
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