I am seriously considering starting a Firearms/Defensive Tactics Instructional business...

I have infrastructure in house, IT, Web Design and Marketing from my wifes company that I can task to perform these skills...

I have an office space I can use here on site...

I am a former USMC PMI Prmary Marksmanship Instructor, formerly NRA certified instructor, Range master, Range NCOIC, Georgia Staet LEO Firearms Instructor, USMC Rifle Team Shooter, USMC Armorer, Glock and SIG factory armorer.

My question is....what do you guys write off? What are you expensing? Amortizing equipment?

What are your equipment costs?  Range Costs?

What part of these are you writing off as business expenses? Personal guns used for instruction? Ammo, Targets? Vehicles, Advertising?

Thanks

Capt Beach

Consult either IRS publications, which is what my wife did, or a tax attorney for THE BEST advice.

In short, just about anything that is used DIRECTLY for, or in connection with, CONDUCTING BUSINESS.

ETA- Do it... while I don't really make much (actually I show a loss on my tax form which was a surprise), I enjoy meeting folks and seeing a variety of gear.  Best thing... it keeps you sharp and up to date.  I learn something with every class.  If you're looking to do it to PAY THE BILLS... good luck, the training market is tight right now for various reasons... at least it has been lately... you get a bunch of folks signing up and then cancelling at the last minute... frustrating at times.  So I do it as more of a hobby.  I have developed a specific client list though... a central core/group train with me regularly... which is nice.

As a tax professional, let me quickly address the issue I highlighted. You are allowed to write off the cost of equipment only to the extent that it is used to further the business. So, if it is a personal gun, you have to consider what percentage of the time it is used for business and what percentage of the time it is used for personal use.

For example, let's say you carry a Glock 19 365 days a year as a personal defensive firearm. Let's further state that you teach one class a week, each week of the year. That would mean you could write off 52/365 of the cost of that pistol. For something like a Glock 19, that means you're able to write off less than $75 (<$60 if you bought it through the GSSF or blue label program). Now, if you owned two G19's, and used one solely for CCW and one solely for teaching, you could write off the entire cost of the second gun.

"Writing off" the cost of a piece of business equipment is based on depreciation. Currently, the IRS uses the Modified Accelerated Cost Recovery System (MACRS) for figuring the depreciation of an asset for tax purposes, regardless of the method the business uses for bookkeeping purposes. You should also be aware of Section 179 depreciation, which allows a business to depreciate, for tax purposes, the entire cost of new equipment, up to $500,000, in the year in which it is placed into service. (New meaning brand new, not just new to you.) So, if you did find yourself wanting to add several guns to your training collection, if you bought new guns, you could take their entire costs off of your business income for that year. The government did this to entice businesses who've had a banner year to reinvest in the business, rather than holding on to the money in retained earnings, which is supposed to help spur the economy.

How does this help you? If you start a training company, it might behoove you to have a number of guns for students to use, particularly if you're going to teach NRA basics classes, or carry permit classes. You might also be inclined to pick up some optics, shot timers, body armor, whatever. So long as it has a useful life of more than a year, it is to be depreciated. If you're going to do so, give serious thought to buying brand new, so that you can take advantage of Section 179 depreciation. The IRS usually considers that kind of stuff to have a 5-year economic life. Obviously, there are some things you might want to buy used, such as police/security guard trade-in guns. These can be a great way to get some decent guns for a great price. Since they're used, though, they must be depreciated over the full five years. If it's stuff that is going to be used up within a year, such as ammo, targets, eye protection, rubber ear plugs, etc., you don't depreciate it, rather you simply expense it immediately.

Of course, as I said in the beginning, you can only depreciate to the extent that the item is used in the furtherance of the business. If you do decide to pick up some guns for training aids, you shouldn't be taking them to the range for personal use, or using them as your carry guns, lest you have to decrease the amount you can depreciate. And, of course, this is only a real concern if you are audited by the IRS. And, if you do take them to the range with you, make it a habit to carry a bunch of business cards, which you give out to people after giving them a demonstration with your business' gun. Then,you wouldn't be lying to the IRS when you said that you used the gun in an advertising attempt, which is a legitimate business use. If you had a website, blog, or newsletter where you posted reviews of guns, gear, ammo, etc., for your students and customers, any trips to the range could easily be justified as business usage if they were meant to compile information for your reviews.