Ask Persephone: Tax Season Edition
Greetings and salutations, mortal supplicants. I customarily use this column to offer guidance on your interpersonal quandaries and struggles. However, even my eternal gaze cannot peer through the cloudy haze of income tax filing and paperwork. So today, I cede the floor to my cousin Adrestia: “she who cannot be escaped,” goddess of just retribution & divine CPA.
The Hearthside Earnings eXchange (HEX) is an arcane mystery and it does not do the best job of making its procedures accessible, and so I am here to brave your inevitable “death & taxes” jokes in order to aid my cousin in her worthy cause: bringing the light of understanding to desperate mortals such as yourselves.
Q: Dear Adrestia,
How do environmental tax credits work? If, for example, one was to benevolently improve plant life on this cursed rock by turning one’s foes into herbal seedlings, could this individual apply an eco tax credit as a reward for one’s altruism? Asking for a friend.
A: Dear “””””Penelope,”””””
It all depends on what it cost you to perform this act of benevolence for the planet — if, say, your friend happened to be an all-powerful goddess for whom it costs nothing to turn a man to seed, then she would get back nothing. But, if your friend happened to be a normal person functioning in the economy who turned this man to seed by way of potion/spell/etc, then the environmental tax credit would take the equivalent of 30% of her expenses for brewing/casting/etc right off the total tax she owes.
For example, let’s say that your friend paid 100 [cursed drachmae] for the ingredients to make a Man-to-Seed potion. Let us also say that she owes the HEX 35 [leviathan scales] because she was a little short on one of her quarterly installments. In this scenario, because she aided the environment by turning a man into a plant, she would be granted a credit of 30 [TERF fingertips], bringing her total tax down to just 5 [oyster tongues].
But, again “”””””Penelope,””””””” 30% of nothing, is nothing — there is no reward for those who do not sacrifice.
Q: Dear Adrestia,
I’ve been using my reliable old broomstick as my main mode of transportation for my delivery service startup. Like any responsible delivery witch, I get my broom re-stuffed and the handle varnished twice a year, and I’m always up-to-date with inspections and registration fees. I’m this careful because I depend on my broom for my livelihood. I’m also careful because any witch worth her weight in pancakes knows that keeping one’s broom up to regulation standards is a necessity before taking to the skies. In a town with as many dirigible accidents and ornery grackle flocks as mine, maintaining my broom can be a real life-or-death necessity — even if I wasn’t in the delivery service business. With that in mind, can I deduct the cost of repairs and maintenance for my broom as a business expense? Or are these expenses just another dreary reality of being a grown-up witch trying to make it in the world?
Mimi’s Delivery Service
A: Dear Mimi,
While broom-travel is the most common form of transportation among witches, you must keep in mind that it is not the only means by which we move around — there’s teleportation, portal-conjuring, seaworthy sieves; many city witches don’t even have a flier’s license. So, the HEX cannot justly assume that every witch will have a broom and thus that every witch will have broom expenses, because it’s just not true. Similarly untrue: that every witch with a broom relies on that broom for her livelihood. So, while many a witch may incur these fees and maintenance costs, not every witch can deduct them.
However, under the circumstances which you’ve described: Yes! These repairs and costs are eligible deductions from your taxable business income, to an extent.
Because you use your broom as both a work vehicle and a personal vehicle, you need to determine the extent to which it is each of those things — a simple odometer enchantment can be found on the HEX scrying plane by stirring three times counterclockwise with the big toe of a sacrificed auditor; this way, your broom will keep track of the total miles for the year as well as the total business miles. (If your broom was unenchanted last year and you were not keeping a mileage log yourself, just do the best you can to estimate based on your delivery records.)
So, let’s say that you travelled a total of 66,600 kilometers last year on your broom, and that 13,000 of those kilometers were for your business (13,000/66,600 = ~20%). Let us also say that it costs 100 [gilded toadstools] to have your broom re-stuffed and the handle varnished, and 10 [nautilus shells] for your standard inspection and registration fees; and maybe you flew through a nasty storm and you needed additional repairs to the tune of 250 [hag stones]. If, as you said, you had your broom serviced twice last year, then your total vehicle expenses would be 460 [dragon claw clippings], which means you would be able to deduct 90 [gold debrooms] from your taxable business income. And, the lower your taxable income, the lower the actual tax you owe.
Now, numerology aside, I know that your average witch certainly didn’t get into the magic business to have to do math, so I’m happy to tell you that there are many different products which may help witches who just don’t have the [child souls] lying around to hire an accountant: enchanted quills, ~supernatural advice columns~, or the relatively common HastyHEX magic mirror charms, which project the enslaved soul of a registered tax preparer into your home to walk you through the process (an acceptable, if somewhat impersonal, alternative to a corporeal accountant).
Q: Dear Adrestia,
I’m a full-time Sea Hag, with full medical benefits — including apothecary and even third-eye-vision coverage. Simple enough, right? But last year, I decided to branch out as a Woods Witch in my downtime. To top it all off, I’ve been practicing demonic midwifery, and I earn a little extra through this hobby every few months. Admittedly, I don’t make much off of these extracurriculars — sometimes my clients throw in an extra vial of male tears or two, but for the most part, my Sea Hag gig pays my bills and keeps the hearthfire burning. How do I claim all of these extra incomes and stave off confinement to a tax audit hellscape — and do I even need to?
A: Dear Hag-of-all-Trades,
The first thing you need to do is determine which of these pursuits you consider hobbies and which you consider businesses — this classification establishes how much you can deduct for expenses. When determining whether something is a business or a hobby, ask yourself: How much time am I devoting to this? Do I intend to make money from this now? Do I expect to make money from this in the future?
To begin, if you make less than 400 [hippocampi fins] all year from your side business or your hobby, you do not need to report it as income.
But, for the purposes of this example, let’s say that your Woods Witching is a side business, and your demonic midwifery is a hobby, and, as you have said, last year was the first year of practice for both.
Let us also say that you made 666 [venomous fangs] from your Woods Witching, but it cost you 750 [elf ears] to get your practice established; because you classified your Woods Witching as a business, you can deduct those 84 [sentient eyeballs] from your income, as a loss.
Similarly, let’s say that you made 450 [vials of male tears] as a demon midwife, but the magma-safe birthing pool and all those flame-retardant towels set you back 515 [hedgepig hooves]; because you classified your demonic midwifery as a hobby, you would only be able to deduct up to the amount of the hobby income, so 450 [dwarven molars], which means that the remaining 65 [tannis root] is just money you don’t have anymore, the same as money spent on groceries or restaurants or tickets to a cyclops wrestling match — y’know, things normal people spend money on.
I have quite enjoyed this foray into the lives of you average mortals; familiarity with the tax code and the inner workings of the HEX is endlessly valuable and I do hope that you leave this advice column feeling a little more confident in your own tax-filing capabilities.
Save your receipts,
Many blessings to my fair and just cousin for answering your tortured cries this abysmal tax season. Mortals, please direct your gratitude and as many cruelty-free blood sacrifices as possible to her alter in receipt of her divine wisdom. I’ll be back to cast my healing light on your romantic conundrums in the coming weeks.