Comments on: 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 http://thomashawk.com/2009/03/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.html Fri, 10 Feb 2012 02:09:43 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Roger Krueger http://thomashawk.com/2009/03/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.html/comment-page-1#comment-31925 Roger Krueger Fri, 27 Mar 2009 14:19:22 +0000 http://thomashawk.com/?p=6062#comment-31925 Another thing to consider before you deduct a camera is that the state sees your federal return. California in particular gets nosey about whether you paid sales/use tax on big-ticket items you deduct. Another thing to consider before you deduct a camera is that the state sees your federal return. California in particular gets nosey about whether you paid sales/use tax on big-ticket items you deduct.

]]> By: Eric in SF http://thomashawk.com/2009/03/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.html/comment-page-1#comment-31690 Eric in SF Thu, 26 Mar 2009 19:21:42 +0000 http://thomashawk.com/?p=6062#comment-31690 I read a similar story last year and will no longer be deducting anything. I make about 5% of my yearly income on photography and I don't plan taking steps to increase that, so I would be at year 3 of no profits if I deducted this year. I read a similar story last year and will no longer be deducting anything. I make about 5% of my yearly income on photography and I don’t plan taking steps to increase that, so I would be at year 3 of no profits if I deducted this year.

]]> By: Ivan Makarov http://thomashawk.com/2009/03/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.html/comment-page-1#comment-31392 Ivan Makarov Wed, 25 Mar 2009 16:44:27 +0000 http://thomashawk.com/?p=6062#comment-31392 To clarify, very few businesses are profitable in the first few years of its operations. If you just started your photography business, bought a nice new camera and bunch of lenses, of course you'll likely not generate more income in the first year than you spent on the equipment. But you have to have a plan in mind of how you will turn it into a profitable enterprise in the next few years if you're deducting your equipment in the first year. If after five years all you do is write new lenses and cameras off without becoming profitable, you should expect for the IRS to come in and disallow the deductions, assess penalties and tax owed on all the past tax returns where you claimed these as deductions. As for a camera, you can deduct the full amount of it in the year of purchase by making an election under Sec 179, which allows full deduction for depreciable assets in the year of purchase up to $250,000 in 2008. To clarify, very few businesses are profitable in the first few years of its operations. If you just started your photography business, bought a nice new camera and bunch of lenses, of course you’ll likely not generate more income in the first year than you spent on the equipment. But you have to have a plan in mind of how you will turn it into a profitable enterprise in the next few years if you’re deducting your equipment in the first year. If after five years all you do is write new lenses and cameras off without becoming profitable, you should expect for the IRS to come in and disallow the deductions, assess penalties and tax owed on all the past tax returns where you claimed these as deductions.

As for a camera, you can deduct the full amount of it in the year of purchase by making an election under Sec 179, which allows full deduction for depreciable assets in the year of purchase up to $250,000 in 2008.

]]> By: TranceMist http://thomashawk.com/2009/03/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.html/comment-page-1#comment-31387 TranceMist Wed, 25 Mar 2009 15:55:37 +0000 http://thomashawk.com/?p=6062#comment-31387 My accountant actually recommended this to me. Worked great the last couple of years. I'll let you know in 5 years how it works out. :) My accountant actually recommended this to me.
Worked great the last couple of years.
I’ll let you know in 5 years how it works out. :)

]]> By: Tommy http://thomashawk.com/2009/03/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.html/comment-page-1#comment-31378 Tommy Wed, 25 Mar 2009 15:07:13 +0000 http://thomashawk.com/?p=6062#comment-31378 My brother in law, a CPA, told me recently: "Pigs get fatter, hogs get slaughtered." My brother in law, a CPA, told me recently: “Pigs get fatter, hogs get slaughtered.”

]]> By: Andy Frazer http://thomashawk.com/2009/03/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.html/comment-page-1#comment-31376 Andy Frazer Wed, 25 Mar 2009 14:55:31 +0000 http://thomashawk.com/?p=6062#comment-31376 I'm not going to argue with an accountant over this one. But I would caution anyone who wants to try this to check with their own accountant, first. I may be wrong, but I thought that the side business had to generate revenue that exceeded a minimum percentage of your total income (from your "day gig") in order to qualify as a legitimate business. I may even be wrong twice (it wouldn't be the first time), but I've also heard that these sort of deduct-your-hobby filings are a red flag for an audit. Again, please check with your own accountant. I don't know what I'm talking about. Andy I’m not going to argue with an accountant over this one. But I would caution anyone who wants to try this to check with their own accountant, first.

I may be wrong, but I thought that the side business had to generate revenue that exceeded a minimum percentage of your total income (from your “day gig”) in order to qualify as a legitimate business.

I may even be wrong twice (it wouldn’t be the first time), but I’ve also heard that these sort of deduct-your-hobby filings are a red flag for an audit.

Again, please check with your own accountant. I don’t know what I’m talking about.

Andy

]]> By: Scott Hunter http://thomashawk.com/2009/03/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.html/comment-page-1#comment-31375 Scott Hunter Wed, 25 Mar 2009 14:51:15 +0000 http://thomashawk.com/?p=6062#comment-31375 Why would a $5,000 camera be considered an expense, not a capital purchase that requires a more gradual amortization write-off over several years? Why would a $5,000 camera be considered an expense, not a capital purchase that requires a more gradual amortization write-off over several years?

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