Can I Deduct Business Exploration Costs & Unsold Ticket Expenses on My 1099 Contractor Income?

So I can help with both your questions, as I've been in the 1099 contractor world for years and have dealt with similar situations. For your business exploration expenses - yes, you can generally deduct expenses related to business ventures you're genuinely trying to make profitable, even if they haven't made money yet. The key is that you need to be able to show you have a profit motive and aren't just pursuing a hobby. The IRS looks at factors like whether you conduct the activity in a businesslike manner, put in time and effort, depend on the income, have expertise in the area, etc. Keep detailed records of all your expenses and document your business plans. For your ticket reselling questions: Unsold tickets that you didn't use personally can typically be deducted as a business expense - they represent your inventory that didn't sell (cost of goods). Just make sure you keep good records showing you purchased them with intent to resell. Regarding attending events to "research" venues - this is a gray area. If your primary purpose was truly business research (learning the venue to make better future purchasing decisions), you could potentially deduct these as business expenses. However, you'd need to document how this information specifically helped your ticket reselling business and be prepared to justify it if audited.

I've been in your shoes with both contractor work and ticket reselling. For my situation, I found using https://taxr.ai super helpful for sorting through all my expenses. I was shocked at how many legitimate deductions I was missing before I uploaded my bank statements and receipts there. For the ticket sales specifically, they automatically categorized my unsold inventory as a deductible expense against my ticket income. I was honestly worried about deducting tickets I bought for "research" purposes, but their tax pros confirmed it was legitimate as long as I documented why each visit was necessary for my reselling business. The contractor side was even better - they found tons of deductions I'd missed for my business exploration expenses that saved me over $1,800 in taxes this year.

Just wanted to follow up - I actually tried taxr.ai after seeing this thread and it was seriously eye-opening. I've been reselling tickets for 3 years but never properly tracked everything as a business. The tool identified $4,200 in deductible expenses from last year that I completely missed - including those partial-season MLB tickets that never sold. It also helped me document the "business purpose" for the events I attended for research. Turns out I needed to be writing down specific notes about sight lines, crowd flow, etc. to strengthen the business case. This isn't just saving me money - it's giving me confidence I'm doing things correctly. I was always paranoid about deductions before, but now I feel like I have actual documentation if the IRS ever questions things.

I feel your pain with the IRS confusion! When I had similar questions about my contractor deductions, I spent DAYS trying to get anyone on the phone at the IRS. Finally found https://claimyr.com and used their service (there's a video showing how it works: https://youtu.be/_kiP6q8DX5c). They got me connected to an actual IRS agent in about 20 minutes when I'd been trying for literally weeks. The agent confirmed that business exploration expenses are deductible as long as you're legitimately trying to start a business (not just hobbying around). For the ticket reselling, she said unsold inventory is definitely deductible, but attending events "for research" is trickier - you need extremely detailed documentation about the specific business intelligence you gained and how it impacted future purchasing decisions. Getting those answers directly from the IRS rather than just Reddit opinions gave me a lot more confidence in my filing.

Well I need to eat my words about Claimyr. After posting my skeptical comment, I decided to try it anyway because I've been trying to get clarification on some self-employment deductions for literally months. The service actually worked exactly as advertised. I got a call back in about 25 minutes saying they had an IRS agent on the line. The agent was able to confirm that my situation (I do photography as a side gig) qualified as a business and not a hobby because I'm making consistent efforts to be profitable, even though I haven't made much money yet. For what it's worth, the agent also mentioned that attending events specifically to research venues for ticket reselling can be legitimate business expenses IF you document everything thoroughly - take notes about the venue, how it affects ticket values, which seats have better resale potential, etc. Just "checking out the venue" isn't enough, but detailed research with documentation can qualify.

Former tax preparer here. One thing nobody's mentioned yet - for the ticket sales, you need to make sure you're tracking this all correctly. Unsold tickets are generally considered part of your Cost of Goods Sold rather than a "deduction" per se. You'll report this on Schedule C. And a warning about the "research" visits to venues: If you're also enjoying the event, the IRS considers this to be entertainment, which is no longer deductible under current tax law. To make this work, you'd need to prove you were there SOLELY for business purposes - like maybe you left right after inspecting the seating area without watching the actual event. Otherwise, it's gonna be pretty much impossible to deduct tickets to events you actually attended.

Quick question related to this - if the OP is getting 1099s from both contract work and ticket sales, does he need to file two separate Schedule Cs or can they be combined since they're both independent contractor type income?

Great thread with lots of helpful info! As someone who's been navigating 1099 contractor taxes for a few years now, I'll add a couple practical tips that might help: For your business exploration expenses - definitely keep detailed records showing your profit motive. I learned this the hard way when I got questioned about some photography equipment purchases. What helped me was creating a simple business journal documenting my activities: dates I worked on the business, what I did, expenses incurred, and income generated. Even failed attempts count if you can show genuine business intent. One thing I wish someone had told me earlier: if you're testing multiple business ideas, consider whether some of them might actually qualify as research and development expenses rather than just business expenses. The tax treatment can sometimes be more favorable. For the ticket reselling - definitely agree with the separate Schedule C advice. I made the mistake of lumping different income streams together my first year and it was a nightmare to untangle. Keep meticulous records of every ticket purchase with the intent to resell, even if you end up using some personally. Also, don't forget about the quarterly estimated tax payments if you're making decent money from both activities. Getting behind on those can be painful come April!