Can You Deduct That Brand New Canon 5D Mark 2 on Your Taxes If You Sell a Few Photos? Tax Tips For the Part Time Photographer
Accountant Ivan Makarov has an excellent post over at his blog regarding how taxable income and expenses are treated for the part time photographer:
“You must declare all income you get from photography, and you may offset it with your expenses if it is a business. In the eyes of the IRS, it is a business when it is ran with for-profit motive. The test that is typically used to determine whether it is a hobby or a business is the level of profitability. If the business has been profitable (generated more income than expenses) for 3 out of the last 5 years, it is a business, and if in the current year taxpayer has a net loss when items of income are netted against expenses, that loss can be used to offset other income. If you do not meet the test, the IRS considers your photography a hobby, and deductions allowed will be rather limited.”
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