Make the most of mail tax deductions in December & beyond
Thursday, December 24, 2020
Ho! Ho! Ho! And Merry Christmas Eve from all the holiday themed towns across the United States.
There are the municipalities dubbed North Pole in New York, Colorado, Alaska and yes, it's even OK in Oklahoma.
For those who revel in the season's greenery we have up the road from me Garland, Texas, as well as virtual forest full of Evergreens. There's an Evergreen in Alabama, Colorado, Louisiana, Montana, North Carolina and Virginia, as well as a Tannenbaum, Arkansas.
We can't forget the associated holiday names, like Noel, Missouri, or Mistletoe, Kentucky, or, for the youngsters and young-at-heart, Rudolph, Wisconsin.
If the religious ties to Dec. 25 are important to you, we have a couple where the carol O Little Town or Bethlehem would be appropriate year-round.
The biblical birthplace of Jesus shares its name with Bethlehem, Pennsylvania, and Bethlehem, North Carolina. There's Nazareth, PA, too.
Don't overlook those towns that cut to the chase with city limits signs reading Welcome to Christmas in Florida and Michigan, along with the slight variations of Christmas Cove, Maine, and Christmas Valley, Oregon.
Santa's eponymous hometown: But for most kiddos — and those of us who still act like we're 8-years-old too much of the time! — tomorrow, Dec. 25, is all about the Jolly Old Elf, St. Nicholas, St. Nick (if you know him well), the Big Guy.
We're talking Santa Claus!
There's Santa Claus, Georgia, and Santa Claus, Arizona. The folks in the Gem State are more casual, at least those who live in Santa, Idaho, are.
But there's only one town named after the master of holiday cheer that gets to officially use a special Santa Claus postmark each December. That's in the ZIP Code of 47579, aka known by its jolly residents as Santa Claus, Indiana.
This town of around 2,500 in the southwest part of Indiana didn't start out with a holiday-themed name. The original settlers back in the mid-1800s wanted to name it Santa Fe, but another Indiana town beat them to it.
So when the residents gathered one Christmas Eve to decide upon a permanent moniker, they went with the seasonally appropriate Santa Claus. Now, the city is known nationwide as "America's Christmas Hometown."
Among its year-round attractions are the Santa Claus Museum and Village, a hotel called Santa's Lodge, the Santa Claus Christmas Store, Holiday Foods, Kringle Place shopping center and Santa's Candy Castle, which claims the title of the first themed attraction in the United States.
Santa Claus' special seasonal postmark: But for folks who still snail mail Christmas cards each December (guilty!), as well as those who write letters to Santa, the town's main attraction is its U.S. Post Office.
Since 1983, travelers from near and far have trekked to Santa Claus, Indiana, to get something they can only get there: the town's annual, holiday-themed official picture postmark, hand stamped every year from Dec. 1 through Dec. 24.
Each year, the red or black stamp is different. And each year, the postal workers cheerily brace for the inevitable avalanche of mail.
This special picture postmark, either red or black, is different each year thanks to local budding artists. As part of an art class at nearby Heritage Hills High School, upperclassmen are encouraged to submit a design for the Santa Claus Postmark during the spring semester.
Finalists are selected and narrowed down to the top design which becomes the featured picture postmark to cancel postage stamps on holiday mail out of the Santa Claus, Indiana, Post Office. Below is the 2020 postmark.
There's no extra cost for the postmark. But don't forget to put a stamp — one of the seasonal ones, of course, that the Post Office offers each year — on your envelope before taking your letter to the Santa Claus, Indiana, station.
Business mailing tax breaks: While snail mail each December does tend to take on a kitschy throwback aura, it's still a valuable tool for many businesses.
Even in this increasing electronic age, some clients like to receive mailed paper invoices. And lots of them appreciate getting your fancy company brochure in its final full color version instead of having to download and print it in black and white using their own equipment.
And, of course, it's a good marketing tool to send your customers a real, delivered-by-a-Postal-Carrier holiday greeting every December, thanking them for their business and continued support into the new year.
That's why the Internal Revenue Service says that postage costs are a tax-deductible item on your small business' tax return.
Line 18 on Schedule C says it is where you enter office expenses. But when you follow the parenthetical direction on the form and "see instructions," they tell you to "Include on this line your expenses for office supplies and postage."
Other business mail and shipping costs: As long as what you're mailing or shipping is business-related, you can deduct the cost of postage, envelopes, P.O. Box rental fees, metered mail machinery and alternative delivery services like FedEx and UPS.
Even a messenger service counts, as long as the delivery method is ordinary and necessary for your business.
Many filers enter enter these not-just-stamps postal/delivery expenses as allowable Other Expenses in Part V of Schedule C. Just be sure to note on the line where you enter the cost exactly what business expense it covers.
And if your company sells physical goods and you pay the cost of shipping, don't forget to count those fees. This expense, however, is calculated as the cost of goods sold in Part III of Schedule C.
If you're unsure about where to claim your business costs, including postage and other mailing and shipping expenses, check out the previously mentioned Schedule C form and instructions, as well as IRS Publication 334, Tax Guide for Small Business (For Individuals Who Use Schedule C), or, of course, your tax adviser.
But do that next week.
Today, Christmas Eve, you've got some last-minute holiday tasks to take care of so you can relax and enjoy Christmas, whatever the name of the place you call home!
You also might find these items of interest:
- The importance of good, and separate, business records
- How ordinary & necessary expenses become tax deductions
- Home office tax deduction still available, just not for COVID-displaced employees working from home
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