Unless you just misquoted him?  Take it or don't?  Nah...that's a lawyer for you  LOL

I would strongly recommend finding a CPA who is hobby friendly to assist you in preparing your Schedule C income and expense schedule.  There's a plethora of deductions that you can and should deduct against your income.  As well (s)he should assist you in reconciling your accounts so that in the event of audit you have a complete listing of how you arrived at the net taxable income.

Feel free to PM me if you want more specifics.  There are other tax professionals on TER that are also well versed in this area.

There are several issues.
1. The expenses have to qualify under tax laws as interpreted by the IRS. The rules concerning business expenses are subject to interpretation and as Chicago CPA mentioned can be looked at as being related or not related. So I would use a very strict interpretation in deciding what expenses you could use.

In case you are audited:
2. You need to have proof of expenses. Credit card receipts, hotel bills, etc. Receipts for anything you paid for in cash.

3. You will need some proof of business during the time that you travel. They might assume that some of the travel is for personal use and you are trying to write it off as business.

If you tell them you are a traveling entertainer (wink, wink),  they will figure out your line of work, but will not turn you in.

I think it would be simpler to just your report your net income.

Example 1: You report $100,000 gross income and report $40,000 of expenses. Claiming a net of $60,000.

Example 2: You report $68,000 of gross income and $8,000 of expenses.
Either way you are reporting $60,000 taxable income. Your taxes are the same.

A business with no claimed expenses can look suspicious as well as a business with very high expenses.

In my mind, this is a safer way to go to lessen you chances of an audit.

If you really want to get into it you read  

    Publication 334 (2013), Tax Guide for Small Business

 


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hat you incur as a part of an illegal prostitution business. Only Mr. Fisher got it right.
 
    Illegal income is, of course, subject to federal taxation. So your ill gotten gains are taxable. But any attorney who advises you lodging and transportation costs can be deducted as ordinary and necessary expenses to your prostitution business needs to retake Baby Tax, as we call it.

       In a very limited category of cases, ordinary and necessary expenses incurred in making money from an illegal enterprise ARE deductible, such as legal expenses after you’ve been indicted. But such expenses are NOT  deductible where the  allowance of a deduction would "frustrate sharply defined national or state policies proscribing particular types of conduct," according to the Supreme Court.

       Is there a sharply defined state policy against prostitution? Check, except  maybe in a few counties in Nevada.

         Is there a sharply defined federal policy against prostitution? That is actually a tougher question but at least if you use the facilities of interstate commerce in furtherance of state law prostitution– which you do when you use the internet – the answer is also yes.

      So if you get arrested for prostitution, plead guilty (which is what usually happens) and then have the bad luck to get audited for that year, any properly trained IRS guy is going to disallow that deduction. If you take the IRS to court,  taxpayers have the burden of proving allowance to a deduction. So you have to prove no state or federal policy. In short you would lose.

     Now probably what your atty is talking about is to declare your occupation as an “entertainer,” so that you stay out of the illegal deduction rules. But unless your name is Cher or J-Lo, claiming to be an entertainer with big deductions is like screaming “audit me.” And if the IRS computer spits out a suspicious activity report on you, it’s all over but your legal expenses after you are indicted which LOL you can pay and deduct

I agree with the premise of getting a business formed (LLC might be ideal for you) and try to create something that reflects your real interests, education and background.  It also makes a great cover for those in your life wondering why you are on the road.   And it sounds like you have someone giving you advice so you are headed in the right direction already.  In my humble opinion, I've always been a believer in pay your taxes and then some.  As much as I hate it, this is not an area I believe in being cheap because to pay for a lawyer and your accountant in an audit will cost you in stress and funds.  I think it is a blessing to be able to do this, especially when many people are financially challenged.  I conservatively use  real expenses that I think won't raise any red flags and I eat the other expenses.  And I straight up pay my taxes on the income earned.  You just don't want to screw with the IRS.