When is it a hobby vs business??

[Josh66]

I only have my camera right now and some stuff I bought to take newborn photos but I have kept my receipts on those. I have everything filed I try and stay organized, that is what having children has taught me. If I don't stay organized everything goes downhill from there.

Find out what the standard deduction is for which ever way you're going to file (single, married joint file, head of household). If your expenses are not higher than that, there's no point claiming it.

 

[sierramister]

I only have my camera right now and some stuff I bought to take newborn photos but I have kept my receipts on those. I have everything filed I try and stay organized, that is what having children has taught me. If I don't stay organized everything goes downhill from there.

Find out what the standard deduction is for which ever way you're going to file (single, married joint file, head of household). If your expenses are not higher than that, there's no point claiming it.

From my discussion with my accountant, you better have a strong business before you write off any business expenses from photography, if it isn't your day job.

Consider that I pressure wash a few houses in my neighborhood with my pressure washer, and I make $500 a year. You could bet your butt the IRS will be knocking at my door if I try to write off my pressure washer and water bill as business expenses.

The bottom line is that the IRS is going to see your camera as a hobby, and you're going to pay a penalty.

You have to register with the state to collect sales tax. You have to be making a lot of money from photography before you deduct any camera expenses. Be wary of the advice on here and talk to an accountant.

 

[Josh66]

Oh - I wasn't trying to say that he should claim it as an expense - I was just pointing out that even if he could, it wouldn't be worth it because it didn't sound like he would have had anywhere near enough to make skipping the standard deduction worth it.

I've only had to itemize once ... ever. A couple moves, a new toolbox, and a bunch of tools... Added up to quite a bit.

There are lots of things you can claim, but if they don't add up - there's no point doing it.

 

[Bitter Jeweler]

I'm no tax expert, maybe someone else can answer this.

If u spend 2000 on camera gear, but had an income of $1500 from using it, is that actually income? Since you're still in the hole $500

No, you usually cannot write off business expenses for camera gear until you've really started making money from it. As a hobbyist, I've heard it is around 3 years of profit before you can write anything off.

No writing off business expenses, but they sure do expect you to write ON any business profits for taxing!

Do NOT write off your camera until you've talked to an accountant, I am no expert!

Wrong.

You can write off expenses any time. You have to form a company first.
A hobbyist cannot write off anything. If you are going to claim the income, it's best you organize as a business. The government gives you 3 years of claiming losses, before they start giving you the evil eye. You have to start showing profit after three years.

 

[JeffieLove]

Or you can be like me and since I'm a photography student, all of my photography gear gets written off as student expenses. I haven't made a profit if you add up the amount that I have made from photo sessions with friends and family vs. what I've spent on gear.

 

[Starman Photo]

I can't believe I'm surrounded by tax evaders. We're all going to jail

 

[BuS_RiDeR]

Dont report anything. Its your money and you earned it. What they dont know wont kill them.

tax fraud never hurt no one :lmao:

I needed a good laugh. Thank you. :thumbup:

I am in Canada... I think the tax laws are a bit different here. But then again I have no clue where Vickery is. And I'm too lazy too look it up right now...

 

[usayit]

You have to form a company first.

More specifically.. you might be asked to prove you are an independent formed entity.

As a contractor with a formed company using another company's resources (computers, office, management chain.. etc), the IRS might still consider me an "employee" of said company and thus not privy to writing off certain expenses.

As a contractor that uses my own resources to complete deliverables to another company complete with paper work (contract, statement of work, etc), I would have satisfied (hopefully) their requirements and avoid unwanted attention.

The difference is subtle and many people still get away under the radar... but you are still liable. In the old days, people were writing of a lot of stuff simply by forming a LLC. Those days have expired many years ago.

 

[quickphotography78]

Now since I am filing a business/trade name will I have to turn it into a business at some point?? Or will I be able to keep it as a hobby?? Oh yeah vickery you don't want to know middle of no where. But near Sandusky/Cedar Point

 

[vtf]

Keep records, I believe as long as you spend more than you take in then it will stay a hobby. The IRS gives you 3 years to show a profit with your business or it will declassify it to a hobby and you lose the tax filing status.
Worst place to get financial advice-forum, best place-certified accountant.
Good Luck :thumbup:

 

[Geaux]

What if you do the shoots for free and they tip you

 

[NikonNewbie]

Well...I had a business but it was not photography...and even though I didnt ever really "get a paycheck" from my business because what came in, went back out in inventory replacement...you still have to claim it.
Here in crap-0-la D.E. once you register your business name you get your little tax report book and every 3 months you have to send in the slip saying how much you made. If it was under 20,000.00 you didnt owe the state anything....if it was over you were to include a check with the slip.
I never made that kind of money .
So, it's best to look into the laws of your state, so you dont end up with a nice audit at tax time.

Also...yes if you start a photography business you certainly can claim your camera...the battery...the cables...the paper you buy for letterhead...you can claim the room in your house you use as a studio, you can also claim a portion of your electric bill etc...
get a good tax person, and you will see that an at home business has tons of dedcutions...however-if you dont' make enough money to even offset the taxes its not worth it. KWIM?

 

[NikonNewbie]

I'm no tax expert, maybe someone else can answer this.

If u spend 2000 on camera gear, but had an income of $1500 from using it, is that actually income? Since you're still in the hole $500

No, you usually cannot write off business expenses for camera gear until you've really started making money from it. As a hobbyist, I've heard it is around 3 years of profit before you can write anything off.

No writing off business expenses, but they sure do expect you to write ON any business profits for taxing!

Do NOT write off your camera until you've talked to an accountant, I am no expert!

Wrong.

You can write off expenses any time. You have to form a company first.
A hobbyist cannot write off anything. If you are going to claim the income, it's best you organize as a business. The government gives you 3 years of claiming losses, before they start giving you the evil eye. You have to start showing profit after three years.

what he says is true...

 

[NikonNewbie]

I must correct myself here...no it was not when I filed my business name that I started getting correspondence from Uncle Sam...it was when I filed for my business License that it all started. Also, at this time I had to hire an accountant...and I paid more for her e-mails and telephone ?'s then I ever made in my business!
j/k...but really it's gets expensive, so do yourself a favor and learn how to manage your own money...my accountant charged me $90.00 for answering an email that she sent to me...asking if I was ready to file!!!!
grrrr.:x

 

[KmH]

Well I am planning on registering a business name in my state and I am trying to figure out what to do from there. I feel clueless at this point about what the government expects or wants. To bad nothing is ever easy or maybe I am just thinking about it too much

Start locally. Your first concern is to make sure you don't run afoul the local authorities.

What country/state is vickery in?

State requirements will be stated online.

As soon as you accept money for your service, you are in business.

You are also suppose to report any online purchases that were not subject to sales tax at the time of purchase....

Usually only in states that have a use tax.