Writing Off Expenses For Guest Interviews
Article Summary
Writing off expenses for guest interviews is critical for content creators, podcasters, journalists, and businesses leveraging interviews for brand growth or revenue generation. In the U.S., improper classification of these expenses can trigger IRS audits, penalties, or lost deductions. Federal and state laws strictly limit deductions to expenses that are directly tied to business activities, with nuance around entertainment, travel, and home office costs. Small media businesses, self-employed professionals, and LLCs are most affected, particularly those deducting meals, equipment, or travel for guests. Key challenges include separating personal/business use and navigating post-TCJA (Tax Cuts and Jobs Act) restrictions on entertainment write-offs.
What This Means for You:
- Immediate Action: Document the business purpose of each guest interview expense (e.g., “Recording equipment for podcast with industry expert”).
- Financial Risks: Audits may disallow improperly apportioned expenses (e.g., 50% meal deduction rule) or non-business-related costs.
- Costs Involved: Expect to substantiate expenses with receipts, logs, and documentation retained for 3–7 years.
- Long-Term Strategy: Implement IRS-compliant tracking tools (e.g., mileage apps, digital receipts) to streamline claims.
Explained: Writing Off Expenses For Guest Interviews
Legal Definition: Under IRS Publication 535, a tax write-off for guest interviews is an “ordinary and necessary” expense incurred during the production of interviews for business purposes. “Ordinary” means common in your trade (e.g., podcasters booking studio space), while “necessary” implies the expense is helpful and appropriate (not extravagant). Federal law (IRC §162) permits deductions only if costs are directly tied to income-generating activities. State rules, like California’s conformity to federal entertainment expense bans, may further restrict claims.
For example, flying a guest to a recording studio is deductible if the interview supports your business (e.g., marketing a podcast). Conversely, luxury hotel upgrades unrelated to the interview’s production quality are non-deductible.
Writing Off Expenses For Guest Interviews Principles:
The IRS requires expenses to exclusively serve a business purpose. Mixed-use costs (e.g., a home office used 60% for editing interviews and 40% personal use) must be apportioned. Only the business percentage (60%) is deductible. Under IRC §274, entertainment expenses (e.g., taking a guest to a baseball game) are 100% non-deductible post-TCJA, even if business is discussed. Meals remain 50% deductible if the interviewee is present, and discussion relates to the project.
Example: A $200 dinner with a podcast guest is 50% deductible ($100) if the conversation focuses on interview topics. A $300 concert ticket for the same guest is fully non-deductible as entertainment.
Standard Deduction vs. Itemized Deductions:
Most taxpayers take the standard deduction ($13,850 single, $27,700 married filing jointly in 2023). However, business-related guest interview expenses are not itemized deductions—they are claimed as business expenses on Schedule C (self-employed) or Form 1120 (corporations). This bypasses the standard deduction entirely. Freelancers may also deduct these costs against self-employment tax.
Exception: W-2 employees cannot deduct unreimbursed guest interview expenses after TCJA suspended miscellaneous itemized deductions until 2026.
Types of Categories for Individuals:
Self-employed individuals may deduct:
- Direct Costs: Recording equipment, software, guest travel reimbursements.
- Indirect Costs: Home office percentage (if used for editing), internet (based on usage %).
- Meals & Lodging: 50% of meals during interviews; 100% of lodging if hosting overnight guests.
Non-commercial creators (e.g., hobbyists) cannot deduct expenses unless interviews generate taxable income.
Key Business and Small Business Provisions:
Businesses may deduct:
- Travel: 100% of flights, rental cars, or hotels for interviewees if contractually required.
- Production Costs: Studio rentals, editing services, promotional materials.
- Employee Expenses: Wages for staff coordinating interviews (bookkeepers, producers).
LLCs and S-corporations must report these expenses on business returns, not personal returns.
Record-Keeping and Substantiation Requirements:
The IRS requires contemporaneous records (logged within 30 days) under IRC §274(d):
- Receipts/invoices over $75
- Logbooks with dates, locations, business purpose, and attendees
- Mileage logs (start/end points, miles driven, purpose)
Records must be retained for 3 years from filing or 7 years if claiming a loss. Insufficient documentation during an audit leads to disallowed deductions and penalties up to 20% of underpaid tax.
Audit Process:
IRS audits focus on disproportionate expenses (e.g., $10,000 in annual guest meals for a small podcast). Agents may:
- Request receipts and logs via mail (CP2000 notice) or in-person interview.
- Cross-check guest referrals against episode release dates.
- Disallow expenses lacking a clear business nexus (e.g., interviewing friends without audience reach).
Example: A YouTuber deducting $5,000 in guest meals may need to prove each guest’s relevance to their channel’s growth.
Choosing a Tax Professional:
Select a CPA or Enrolled Agent specializing in media/entertainment taxes. Key qualifications:
- Experience with IRC §274 entertainment disallowances
- Familiarity with state laws (e.g., New York’s strict meal deduction documentation)
- Proficiency in expense allocation methods
Ask: “Can you provide an example of how you apportioned a client’s interview-related home office expense?”
Laws and Regulations Relating To Writing Off Expenses For Guest Interviews:
Federal:
- IRC §162(a): Ordinary and necessary business expenses
- IRC §274(n)(1): 50% meal deduction limit
- IRC §280A: Home office deductions (regular and exclusive use)
State: California FTB Pub 1131 fully adopts federal entertainment exclusions, while Illinois allows 50% meal deductions aligning with federal rules. Texas lacks income tax but requires sales tax paid on equipment to be deducted federally.
IRS Publications:
People Also Ask:
- “Can I deduct gifts for podcast guests?”
Yes, under IRC §274(b), you may deduct up to $25 per guest annually for tangible gifts (e.g., branded merch). Gifts of entertainment (concert tickets) are non-deductible.
- “Are Zoom interview costs deductible?”
100% of software subscriptions (Zoom, Riverside.fm) are deductible if used exclusively for interviews. Internet expenses require prorating based on business use percentage.
- “Can I write off a guest’s flight if my podcast isn’t monetized yet?”
Only if you can prove profit motive (e.g., business plan, marketing efforts). Otherwise, the IRS may classify it as a hobby expense, which is non-deductible per IRC §183.
- “What if my guest is a relative?”
Deductible only if the interview serves a bona fide business purpose (e.g., relative is an industry expert) and compensation is reasonable (no inflated rates).
Extra Information:
- IRS Publication 535 (Business Expenses): Details “ordinary and necessary” tests for guest-related costs.
- California FTB Entertainment Rules: Confirms alignment with federal entertainment expense disallowances.
- NantMedia Podcast Tax Guide: Industry-specific benchmarks for equipment deductions.
Expert Opinion:
Meticulously documenting guest interview expenses is non-negotiable for avoiding IRS disputes. Understanding the interplay between federal deductibility standards and state-level adaptations—particularly for meals and entertainment—is essential to maximize savings while maintaining compliance. Proactively consulting a tax professional versed in content production ensures deductions withstand scrutiny.
Key Terms:
- Podcast guest interview tax deductions
- IRS Section 274 meal deductions
- Business vs hobby interview expenses
- Substantiating guest travel costs
- Home office deduction for content creators
*featured image sourced by DallE-3
