I had a question about allowable deductions from consulting money. I am a staff physician at a hospital and earn a few thousand dollars a year extra serving on advisory boards as a consultant.

For the holidays, I give me secretaries and nurse practitioners between $100-$250 bonus.

Is that bonus money an allowable business expense deduction from my self employment income from the consulting work? I suppose one can look at it somilar to when a company buys gifts to give out to employees. Although the nurse practitioners and secretaries are not my employees, but rather hospital employees, they do help me maintain my skills which allows me to do the extra consulting work,

THanks

Zip Code: 02114

You can deduct any expense that is both "ordinary" and "necessary" in connection with the income you earned. If this staff is somehow connected to the income you earned, why not deduct the bonuses you paid to them? You can either go with the reason you gave in your question, or perhaps you could argute that these staff members allow you to free up some time to earn the consulting income.

Keep in mind when you file your tax return, you'll most likely include a Schedule C-EZ to report your few thousand dollars of consulting income and the related expenses you are deducting. The Schedule C-EZ is a 3 line form. On line 1 you put your income. On line 2 you put your total expenses. And on line 3 you put your net income. So the IRS will not know the different expenses that you included as part of line 2.

Zip Code: 01801

I give christmas bonuses to ancillary folk that make my hospital life easier...

it is my understanding that corporations can make gifts - and that is what i classify them as... also, i keep the gifts at below $600, otherwise you'd have to give them a 1099

Zip Code: 02891