Tax Help

[brian_f2.8]

Last year was my first year doing sports photography for clients and websites, officially on the books. I have spent a lot of money and want to deduct all the miles and gear I bought. Any help how to do this would be helpful.

 

[pixmedic]

given recent changes in tax laws, and the sheer VOLUME of tax laws...I would consult a tax PROFESSIONAL!
(and certainly NOT rely solely on internet peoples)

 

[KmH]

Who maintains the various, required business and accounting records, you or a qualified accountant?
As mentioned, it's a very good idea to have someone knowledgeable handle both the federal and the state taxes.

A good source of tax information is the IRS itself.

IRS Announces 2012 Standard Mileage Rates, Most Rates Are the Same as in July

If you get audited you'll need to have a record of all the miles you drove so the IRS can see which miles were for business and which miles were personal miles.
If you don't have complete mileage records you can present during an audit, IRS will likely not allow your mileage deduction(s).

Money spent on gear is subject to depreciation and amortization, and don't forget you're likely required to pay state Use taxes on any gear you bought that came from out-of-state.

Where a lot of start up businesses get caught out tax wise down the road is the IRS determining that the 'business' was actually a 'hobby', and on that basis possibly disallowing business deductions claimed in prior years.
The IRS looks at the previous 5 years and expects a 'business' to make a profit in 3 of those 5 years including the year the IRS makes the determination. Is Your Hobby a For-Profit Endeavor?

 

[brian_f2.8]

I completely agree with both of you and I wouldnt rely on anyone I dont know, just looking to bounce ideas off someone.

I can verify all mileage because I can prove I was at the event(sports). Since I got paid, it would have to be for business not a hobby. I can claim a loss for 2 years. Ill double check with my accountant but Im just looking for some help.

 

[Josh66]

I hope you saved your receipts...

 

[brian_f2.8]

for miles? well i can't get from my house to the event with out driving?

 

[Josh66]

for miles? well i can't get from my house to the event with out driving?

I'm assuming that was in reply to my post ... ignore this if it's not.

I meant receipts for 'everything'.

 

[brian_f2.8]

im not worried about food but the miles and hotels add up, yes i can prove that

although im upset about the gear but ill ask an accountant

 

[Bitter Jeweler]

Dude, why isn't your accountant answering your questions and doing your taxes and telling you what you need? That's what they are for. If you still need to come here for help, I'd suggest a new accountant.

 

[brian_f2.8]

i havent asked him yet, i didnt event get my real jobs paper work yet. im in the beginning stages. im just asking what others have done.

 

[KmH]

I can verify all mileage because I can prove I was at the event(sports). Since I got paid, it would have to be for business not a hobby. I can claim a loss for 2 years. Ill double check with my accountant but Im just looking for some help.

Works for me.

It's your business and your money (fines/penalties) if you get audited and don't have the records required by federal tax law.

You're asking for someone else to do your due diligence, which is not a best business practice.

 

[brian_f2.8]

Yeah I have credentials and assignments to prove it, im not worried about verification i just asking for others help. ill ask a few pros i know, ill see them at sebring in march

 

[Bitter Jeweler]

No, you should be asking an accountant!

Make a list of questions you have, and go meet with one.

 

[brian_f2.8]

i will do that since i pay him enough, whats wrong with asking multiple sources?

 

[Bitter Jeweler]

Why ask people who aren't accountants?