The Tax Table for Trapper’s and Hunter’s by: John Chagnon
Tax Deductions for Trappers & Hunters
If you’re like me, you are going to continue to trap whether you make or lose money. The tax laws were set up to collect taxes from profitable business and provide relief for those that lose money. Usually a business venture does not show much profit the first few years and the tax system allows the new venture a chance to get started. Likewise, most new trappers will not recoup their investment in trapping supplies in their first couple of years on the line. However, in the trapping industry we experienced a decline in the amount of revenue we take in from furs, while the prices for traps and trapping supplies have continued to increase.
Trapping is a business venture, whether you do it full-time or part-time. We collect revenue from the sale of our furs and pay expenses in the process of collecting the furs. When the total amount we collect from the sale of our furs is less than the amount we spend on supplies and other expenses; we can take a loss on our tax return, which lowers the amount that we have to pay Uncle Sam and Mr. State. Or, if you already have a refund coming, the trapping loss would increase your tax refund, assuming you have a job that withholds taxes from your paycheck.
If you receive a Form 1099 Miscellaneous Income Statement from the sale of your furs, you will be required to report that income, because a copy of the form is also forwarded to state and federal tax authorities. You could just report the income and pay taxes on it, or file a Schedule C and deduct your expenses from the income.
If someone else prepares and files your taxes, bring a copy of this article with you and the tax preparer will know what I’m talking about. If your tax preparer does not know what I’m talking about you’d better start looking for another tax preparer. If you never received a 1099 for your furs sold, your tax preparer would probably never guess that you spend more money pursuing the fur then you collected. The same tax deduction could be used by coon, fox and coyote hunters who spend a lot of money on dog food, dogs, guns, calling supplies and gas.
We will leave the details for filling out the tax returns and Schedule C to the tax preparers. The income side is easy. It is simply the money collected from the sale of your furs. The expense side is any expense you incurred in the course of prospecting, trapping and handling your furs.
Some examples of trapping deductible expenses are lures, baits, traps, wire stakes, subscriptions to trade magazines (The Trapper & Predator Caller) and any other supplies. Your travel mileage is also deductible and is either actual vehicle expense or a standard rate-per-mile. The standard rate-per-mile is the easiest to use. If you’re interested in using the actual vehicle expenses, I would suggest getting professional advice, because there are more complicated rules with this method.
The important point is that all travel looking for fur, checking traps and any other travel associated with your trapline, is deductible. This includes travel to state and national trapping conventions (trade shows).
Normally work clothes are not tax deductible, but trapping gloves, waders, and snowshoes used for trapping would be deductible. Fur shed supplies like knives, stretchers, and even your fur sheds are deductible. Once again, if you are going to deduct your fur shed, a tax professional should be consulted. The fur shed would be deducted over a number of years through depreciation expense.
When you are trying to add up expenses, you want to get everything. The following is an example of something that could be over looked.
Let’s say you spend a weekend camping on a lake or river in the middle of summer. If you’re like me, when I go camping in the summer ill spend one hour fishing and the rest of the day looking for muskrat and beaver dens and sign. The point is, your whole camping trip could be deducted including your meals, travel and any other expenses incurred on the trip. The important thing is document all such trips or any other expense incurred during the year. It is too hard to remember details when you’re filling out your tax return, and a whole lot harder to explain to an auditor.
A file should be set up to keep all documents, such as copies of checks for expenses, mileage log book, invoices (receipts), and any notes that help clarify the trapping use. The mileage log book should include dates, miles traveled and purpose. Any notes should include date, amount and reason the expense was incurred. Not only will this organization help you fill out and support your tax return, it will provide you with useful information to use in the future.
For example, the logbook will let you know where you were last trapping season when you caught 10 foxes in one day. Or the copies of supply bills will let you remember which supplier provided the items you liked or did not like.
The bottom line is if you incur an expense related to your trapline, it is tax deductible. And remember, you’re not cheating anyone by deducting them. You are just using the tax system that was set up for all Americans, whether you’re Corporate America or a Proud American Trapper.- John S. Chagnon, Division Manager www.PcsOutdoors.com