Before MFI Works:
Matt W. is a traveling professional entertainer. He plays violin and performs at the highest level, including concerts halls like Carnegie Hall . Because of his job, he travels internationally and has a lot of travel expenses. This industry can be challenging because professionals with travel expenses tend to get audited heavily by the IRS. The IRS audits this category heavily because travel expenses have a history of abuse and can either be personal or business in nature.
His Tax Problem:
Due to his traveling, Matt ended up getting audited. He had to provide bank statements, receipts, and other forms of substantiation to the IRS. Unfortunately, his income and travel expenses were off, which caused a big problem for him. It was going to wipe out a lot of his deductions.
MFI Works Solution:
MFI Works did his audits before sending his records to the IRS. We found that we had to amend the returns and that Matt did not depreciate his violin. He didn’t realize he could depreciate his violin because he received it as a gift from his dad. There is a tax law that allows you to depreciate a gift if you use it in your business. This depreciation gave him $48,000 in deductions, and he ended up getting a refund instead of owing money (for both the state and IRS).
