Professional photographers capture some of the most important moments of each day. Perhaps you take pictures at press conferences, weddings, sporting events, or natural wonders of the world. While you’re probably an expert at timing, you may not have as much experience when it comes to handling business accounting requirements.
So, in honor of Photographers Appreciation Month, consider the following tax tips for photographers to help you save every penny and stay compliant with Uncle Sam.
Tax Tips For Photographers
1. Determine if photography is just a hobby or is making you money. If it’s a hobby, you are not eligible for tax deductions and benefits. If you make a living as a self-employed photographer, or you earn income on the side through occasional freelancing, you can claim certain tax write-offs and benefits on the expenses you incur to perform this work.
2. When working as a photographer, it’s critical to maintain solid records to verify your eligibility for certain tax deductions and benefits. Records include receipts, invoices, previous years’ tax returns, and other tax-related documents. These records are critical for proper bookkeeping as well.
3. If you work as a photographer in other states, you’ll face state income tax filings for those specific states. For example, if you live in California and get a paycheck for photographing an event in Arizona, you must file state income taxes for this work based on Arizona’s tax laws. This same concept applies to doing work in cities with local income taxes on the books.
4. Don’t forget about state sales taxes. If you sell tangible products like prints or photo DVDs, you must collect sales taxes on these items. Sending photos to clients electronically is often a way to get around collecting sales taxes because no tangible goods are being exchanged. So, be sure you understand your sales tax duties within your specific location of doing business.
5. If you claim the vehicle deduction for travel to various events to perform photography work, remember that you can only claim one of the two options for this write-off – either mileage or actual vehicle expenses. Be sure to specifically document this information in a mileage log or spreadsheet.
6. Consider incorporating your photography business. It shows that you are serious about practicing your trade, and you may be eligible for additional tax benefits. Having a legal business entity as opposed to a sole proprietorship or partnership also reduces your chances of getting audited by the IRS.
Tax Deductions For Photographers
As a photographer who earns 1099 contract income, you may be able to write off the following expenses in your image-capturing work:
- Photography equipment, i.e. digital cameras, tripods, accessories, photo printers, etc.
- Background imagery, photo boards, posters, etc.
- Photo editing software, i.e. Adobe Photoshop
- Marketing expenses, i.e. a website, business cards, flyers, social media ads
- Travel, i.e. vehicle mileage or expenses, airfare, lodging
- Home office expenses, i.e. mortgage interest, rent, Internet access, etc. for related work you perform in your residence
- Copyright fees associated with protecting your photographs
- Subscriptions to relevant publications on photography
- Membership fees paid to professional photographer organizations
- Rent to use a studio for a photo shoot or other photography work
- Professional service fees for accountants, lawyers, business consultants, etc.
If you’re diving into photography or any other trade, get all of the small business tax and accounting assistance you deserve from 1-800Accountant. Call 1-800-222-6868, or learn more at www.1-800Accountant.