Best Tax Deductions for Event Planners

How to maximise savings & compliance when running an event planning business

Operating an event planning business involves keeping dozens of balls in the air for clients—and yet just as much time must be devoted to handling the financial ins and outs. Those are some key strategies for how to prevent funding nightmares –- and one of the strongest is knowledge of event planning tax deductions. When you learn which expenses are deductible and the process for documenting these deductions, you can reduce taxable income while reinvesting in growth. This article dissects the most important deductions, practical tips on documentation and year-end strategies you can use to keep more of what you earn.

Direct event expenses

These are expenses that are directly associated with putting on an event. These include venue rental, furniture and equipment rentals (tables, chairs, linens, audiovisual), décor, floral arrangements, staging and signage. Store invoices and contracts for every event, along with the date, client and reason. If a client reimburses you for some of your costs, there’s generally no deduction for you yet the amounts should be reported correctly to avoid double counting.

Supplies and materials

Consumable supplies such as name tags, programs, stationary, printing tape and gaffer’stape are deductible. Keep tracks of purchases by event or category in your accounting system and hold onto receipts. Small-value items multiply over many events, so don’t forget to include them when adding up what you spend in a year.

Marketing and advertising

Business Development: You can generally claim a deduction for promotional activities that are undertaken to get clients. This expense includes anything associated the website, internet and offline advertising, printed materials used for marketing and photography for promotional use as well as any public relations expenses. If you are making a portfolio of your event photos, assign your costs between promotional use (deductible) and client deliverables (possibly different allocation).

Travel, transportation, and accommodations

You can claim travel to vendor meetings, site visits and events if it is business related. This includes transportation (either mileage or vehicle expenses), airfare, accommodations and taxis or ride shares. Maintain a mileage log and hang on to boarding passes and hotel receipts. If the travel is part personal and part business, only the business travel is deductible.

Meals and client entertainment

And there are times when meals you share with clients, vendors or employees in the course of business are at least partially deductible — if currently at 50% depending on how tax rules now stand. Food provided to employees for the employer’s convenience or while traveling overnight may be handled differently. Record who went, for business purpose and keep receipts with context.

Staffing: wages, contractors, and benefits

Face value payroll for employees is deductible and employer-paid payroll taxes are deductible, as well as benefits, including health insurance contributions and retirement plan contributions. A lot of event planners even use independent contractors — freelance coordinators, designers or technicians. Payments to contractors are deductible, they must be recorded in a way that you can track total payments and provide any required tax forms.

Professional services and fees

You can write off accountant fees, legal advice or business consulting. Let’s say you pay a tax professional to prepare your returns or offer tax planning; those fees also qualify as business expenses. Licensing, permits and registration fees associated with events are also tax-deductible.

Insurance and risk management

Business insurance — including general liability, professional liability, property and event cancellation insurance — insulates your business and is deductible. Include policy premiums paid during the tax year in your expense records.

Education, training, and memberships

You can also deduct continuing education costs to maintain or improve skills you need for your current business. Both conference fees and dues for professional membership, as well as certification costs, are typical expenses for event planners. Maintain a record of certificates, agendas and receipts that demonstrate relevancy to your treatments.

Home office and workspace

If you have a portion of your home that is used exclusively and regularly for business, there may be the possibility of claiming a home office deduction. This can include up to a certain amount of rent or mortgage interest, utilities and insurance. On the other hand, if you rent a second office or studio space that you use mainly for client work and administrative tasks, then such rent is deductible.

Equipment, software, and depreciation

Big-ticket items (cameras, laptops, sound equipment, lighting etc.) may need to be depreciated over their useful life whereas the smaller stuff might qualify for immediate expensing based on rules that apply. As continuing expenditures, a business can write off its subscriptions to software that is used for scheduling, invoicing or design.

Office supplies and utilities

Paper, ink, postage (unless you already factor that in), phone lines, internet costs and other overheads are deductible. Allocate the business portion when services are used for both business and personal purposes (and document in support).

Bad debts and refunds

Worse case, if a customer doesn’t pay and you have already reported the income, they may be bad debt. Another example: refunds or credits you give to clients for cancellations or services not rendered legally lower taxable income if they’re substantiated.

Recordkeeping and documentation

Power to the deductions lies in its documentation. Maintain receipts, contracts, invoices, bank statements and mileage logs by event and by month. Keep good accounts and balance them frequently. Digital scans and backups also are helpful, but make sure they comply with record retention rules.

Year-end and tax planning tips

• Review revenues and expenses quarterly to prevent surprises at year end.
• Speed up valid expenses into the year if you believe tax rates will be higher next year, or delay them if you think they’ll be lower.
• Combine similar tiny purchases so they won't get lost in the pile.
• Plan for large equipment purchases with depreciation and expensing rules in mind.

Working with a tax professional

Despite diligent record-keeping, tax laws change and some rules are complex. “A tax professional experienced with small service-based businesses can find less obvious deductions and help correctly classify workers, in addition to providing year-round tax planning,” he said.

Bottom line

Deductible event planning expenses include costs related to the event, marketing, travel, team support and operations. Sensible record-keeping and advance planning can make it possible to legally maximize deductions an minimize taxable income. Regularly monitoring expenses by event, saving receipts and noting your accounts payable will help keep you compliant and in the best possible position for growth.