Taxes

[Marvin McAbee]

Just wondered what are the best tax strategies for stock photographers.  Expenses for travel, home office, equipment, mileage for vehicle, and other expenses.  If you have equipment that you bought in previous years, can that deducted.  I have studio lighting, backgrounds, and camera equipment bought when I was doing photography just as a hobby.  I am talking about US taxes but I am sure other countries have their taxes too.  

[spacecadet]

Those of us outside the US can't tell you what applies there.

Here some pre-trading expenditure relevant to the business would be deductible, as would either specified office expenses or a flat rate for working from home, ditto mileage, as well as an annual investment allowance covering capital expenditure. There are separate calculations for National Insurance (social security) contributions, with exemptions for low earnings. Losses can be offset against other taxable income.

[Phil Crean]

Taxes varies from country to country...only constant is that we gotta pay 'em

[Guest]

Taxes varies from country to country...only constant is that we gotta pay 'em

 

Have you not seen the Eurozone news lately

 

To the OP, it varies from country to country but you can't always keep stock as a hobby when attempting financial gain (UK is one example) - you may need to speak to an accountant before declaring accounts.

[spacecadet]

 

Taxes varies from country to country...only constant is that we gotta pay 'em

 

Have you not seen the Eurozone news lately

 

To the OP, it varies from country to country but you can't always keep stock as a hobby when attempting financial gain (UK is one example) - you may need to speak to an accountant before declaring accounts.

 

WHat do you mean by 'keep stock as a hobby? I've never found it necessary to use an accountant.

[Sultanpepa]

 

Taxes varies from country to country...only constant is that we gotta pay 'em

 

Have you not seen the Eurozone news lately

 

To the OP, it varies from country to country but you can't always keep stock as a hobby when attempting financial gain (UK is one example) - you may need to speak to an accountant before declaring accounts.

 

Does that not depend on ones earnings from stock. If you're earning less than your expenses, i.e. lens purchase, travel costs, equipment servicing etc. then it may still be a paying hobby. I've been told that HMRC don't like persistent losses being claimed against secondary occupations.

[Guest]

 

 

Taxes varies from country to country...only constant is that we gotta pay 'em

 

Have you not seen the Eurozone news lately

 

To the OP, it varies from country to country but you can't always keep stock as a hobby when attempting financial gain (UK is one example) - you may need to speak to an accountant before declaring accounts.

 

WHat do you mean by 'keep stock as a hobby? I've never found it necessary to use an accountant.

 

 

If you "sell goods or services to make a profit" (HMRC quote), you are probably self-employed and need to tell HMRC. Stock would be just that. An accountant is the best person to ask about this for the OP, in case there may be penalties for not doing so within a reasonable time, it may not apply to the IRS....hence get advice if needed.

 

As for using an accountant, it's the best money I spend each year. Saves me far more that he costs - I simply send in my spreadsheets and let him do his magic - a 'home office' for example is based on house size/hours used etc etc....not a simple calculation...a bit like finding the VAT rates on mileage allowances.....just went back up to 14p (for my engine size) for the calc last month.....HMRC seem to like to bury it these days.

[Guest]

 

 

Taxes varies from country to country...only constant is that we gotta pay 'em

 

Have you not seen the Eurozone news lately

 

To the OP, it varies from country to country but you can't always keep stock as a hobby when attempting financial gain (UK is one example) - you may need to speak to an accountant before declaring accounts.

 

Does that not depend on ones earnings from stock. If you're earning less than your expenses, i.e. lens purchase, travel costs, equipment servicing etc. then it may still be a paying hobby. I've been told that HMRC don't like persistent losses being claimed against secondary occupations.

 

 

They don't. I assumed that the OP was making money from stock and not just doing a speculative write-off. Obviously if you don't make money, HMRC are not going to subsidize a loss making 'business'.

[spacecadet]

OK fair enough but the OP was asking about tax so I'd assumed he knew he was running a business.

I haven't shown a taxable profit for years but the Revenue doesn't seem unduly concerned as long as I'm not claiming tax refunds elsewhere.

[Phil Crean]

 

Taxes varies from country to country...only constant is that we gotta pay 'em

 

Have you not seen the Eurozone news lately

 

Seems it's one way for the rich and another for the rest...Thats another constant   

[Sultanpepa]

 

 

Taxes varies from country to country...only constant is that we gotta pay 'em

 

Have you not seen the Eurozone news lately

 

Seems it's one way for the rich and another for the rest...Thats another constant   

 

Never a truer word spoken. 

[John Mitchell]

Just wondered what are the best tax strategies for stock photographers.  Expenses for travel, home office, equipment, mileage for vehicle, and other expenses.  If you have equipment that you bought in previous years, can that deducted.  I have studio lighting, backgrounds, and camera equipment bought when I was doing photography just as a hobby.  I am talking about US taxes but I am sure other countries have their taxes too.  

 

Here in Canada, it's possible to claim all of the above in one way or the other and within limits, so I imagine that the situation is similar in the good ol' U. S. of A. Tax time gets a bit complicated, but I always manage to figure things out myself. Keep good records and all receipts.

[Ed Rooney]

Just wondered what are the best tax strategies for stock photographers.  Expenses for travel, home office, equipment, mileage for vehicle, and other expenses.  If you have equipment that you bought in previous years, can that deducted.  I have studio lighting, backgrounds, and camera equipment bought when I was doing photography just as a hobby.  I am talking about US taxes but I am sure other countries have their taxes too.  

 

This is what I've found in the past: The best information on how to do whatever about your taxes is available from the IRS themselves. They are knowledgeable and helpful and they will not ask you questions you might not want to answer. IRS information for individuals is 800-829-1040. 

 

http://www.irs.gov/uac/How-to-Get-Your-Prior-Year-Tax-Information-from-the-IRS-

 

http://www.irs.gov/uac/Telephone-Assistance

[Ed Endicott]

My day job deals with U.S. Taxes.

 

Hire an accountant (not H&R Block) to help you out.

 

If I were to make any comments or provide advice, I would point you in the direction of doing some research on Hobby Losses and Passive Activity Loss Limitations.

 

I would not trust the IRS help line for various reasons I won't go into via a public forum.

[NYCat]

I think the money I spend on an accountant is worth it. When I was doing simpler things and not making any money from photography I could do it myself but I don't have a clue how to deal with things like depreciation.

 

Paulette

[fotoDogue]

I use Quicken to track my income and expenses and then use TurboTax to do my taxes. Among other things, it calculates depreciation for equipment I've registered within the software for previous years. Here in the US you'll have to do a Schedule C for income/loss associated with a business. You can claim deductions on equipment purchase during the tax year, but if you want to deduct expenses from previous years you'll probably need to ammend your previous tax form. If you wind up owing more than a certain amount you may have to file taxes quarterly. You may also be able to apply for a resale certificate to avoid sales tax on items purchased in the making of photographic products. Whether or not you're required to charge clients sales tax varies from state to state and may require additional certificates.

 

The IRS website is a good resource for tax information.You can just browse without disclosing any personal information. But as others have said, depending on how much you make getting an accountant may be well worth the money spent.

 

fD

[Ed Rooney]

My day job deals with U.S. Taxes.

 

Hire an accountant (not H&R Block) to help you out.

 

If I were to make any comments or provide advice, I would point you in the direction of doing some research on Hobby Losses and Passive Activity Loss Limitations.

 

I would not trust the IRS help line for various reasons I won't go into via a public forum.

 

Sure, Ed -- it's so much better to seek the advice of foreign nations in a forum, or listen to useless, pointless, cryptic hints from tax "experts" like yourself.  So far only fD and me have said anything worthwhile about US taxes. 

 

Edo

[Ed Endicott]

 

My day job deals with U.S. Taxes.

 

Hire an accountant (not H&R Block) to help you out.

 

If I were to make any comments or provide advice, I would point you in the direction of doing some research on Hobby Losses and Passive Activity Loss Limitations.

 

I would not trust the IRS help line for various reasons I won't go into via a public forum.

 

Sure, Ed -- it's so much better to seek the advice of foreign nations in a forum, or listen to useless, pointless, cryptic hints from tax "experts" like yourself.  So far only fD and me have said anything worthwhile about US taxes. 

 

Edo

 

 

Edo, Attorneys and CPAs cannot legally give advice without being hired - there are liability reasons behind that.

 

To give you an idea about the current environment at the IRS - they have not hired anyone in 6+ years due to budget issues.  They also haven't been given a "salary adjustment" in over 3 years.  That leaves basically two camps from an employee perspective - those that are waiting it out for their pension, and those that just don't care anymore.

 

I've been doing what I do for over 23 years.  Again, for specific advice, hire a reputable tax accountant (I've fixed many errors that were created by H & R Block employees on income tax returns).

 

...and again, it seems the objective outlined in the original post is to write off income....so my advice on looking up hobby losses and passive activity loss limitations are sound - the IRS website is a great resource for publications around the issue

 

I am in no position to tell anyone whether they "materially participate" or "actively participate" in the eyes of the IRS over a public forum.

[Ed Endicott]

p.s. - I disagree with fotoDogue's comments relating to using resale exemption certificates to buy photo equipment and supplies...and so does the State of New York when it comes to stock photography in the sense of how we deal through Alamy

 

http://www.tax.ny.gov/pdf/advisory_opinions/sales/a09_56s.pdf

[Ed Rooney]

Thank you, Ed, for your response to my peevish remarks. Yes, I understand that no one who's qualified to do so can or should give legal advice in a forum. I hope Marvin understands that.

 

Your picture of the IRS being two steps behind the US Post Office, heading for the cliff, is apt, but we can still get valuable information from their site, and if we have the patience, by calling and asking them questions on the phone. 

 

Edo

[Betty LaRue]

I've used an accountant for a long time. One reason being I don't understand the tax forms. Actually it's a case of hate and boredom that causes my eyes to glaze over.

I have a legal size brown envelope where put all my receipts at the time they happen. That makes it easy. I used to have receipts in many places...what a nightmare.

My gal does a good job of it and she's worth every penny. She doesn't go through the motions.

Last tax season, after I had turned everything over to her, she called me and requested mileage.

[fotoDogue]

p.s. - I disagree with fotoDogue's comments relating to using resale exemption certificates to buy photo equipment and supplies...and so does the State of New York when it comes to stock photography in the sense of how we deal through Alamy

 

http://www.tax.ny.gov/pdf/advisory_opinions/sales/a09_56s.pdf

 

Probably true if you're shooting stock exclusively.

[Robert M Estall]

National rules and tax regulations will vary considerably form country to country as already been suggested. Do ask a few local people in a similar situation, if you can't find an accountant used to photography, then an actor, artist,or perhaps a musician. And ask for a ballpark cost figure. But for goodness sake, don't just hand him a shoebox full of receipts and hope for the bset. That's asking them to do your bookkeeping as well as your tax accounts. A very expensive and lazy option! Sit down with an accountant and agree a simple ledger with a few categories of expenses and keep at it. In the UK, being registered for VAT means you have to keep up to date records quarterly which will make annual Inland Revenue accounts a doddle. Thats the main reason I don't go over to one of the simpler VAT schemes. A tax submission by a certified accountant has an increased credibility. As long as you present your records in reasonable order and are not a limited company you should be thinking in terms of a few hundred pounds.

 

And of course, it's tax deductible!

[Marvin McAbee]

To clarify a little further, I retired last October from my job as  Network Technician with the Highway Patrol radio network, and before that photography had just been a hobby.  Now that I have more time I was thing about profit from my photography, and the taxes that would be involved.  I think the rich do have their loopholes so the middle class has to pay.

[Betty LaRue]

I type out a list of all my photography-related expenses. They are separated, by my CPA's request, into durable and non durable. Cameras, lenses, computers, etc is durable, magazine subscriptions, mileage, software, etc is non.