BeachLady Loc: Surfside Beach, SC

I'm having a hard time finding out where to expense camera & lenses on the Schedule C (or in lieu of that, depreciating the equipment over a period of years). Anyone know where it belongs?

Thanks!!

PixelStan77 Loc: Vermont/Chicago

Be Careful. Can you prove you only use those cameras for business? Do you have a registered business with your state. IRS frowns on stuff like that.

OddJobber Loc: Portland, OR

I don't see any mention in your previous postings that you are in business, in which case you wouldn't be using schedule C. Why do you think you are entitled to deductions for your photo expenses?

When that gets sorted out, then we can get into why a photo forum is not the best place to get advice on filing a tax return.

lamiaceae Loc: San Luis Obispo County, CA

First, you must actually be running a photography business and able to prove it.

Second, treating a hobby as a business can be a bigger pain in the ass. Usually you must have a business license with your State, County, and/or City. If you buy supplies with a Tax exemption you'll be dealing in the case of say CA with the State Board Of Equalization. You'll have to keep records of who you sold materials or used supplies to that would have had sales tax on, meaning you have to collect the sales tax from your clients or the government comes after you to pay it for everything you bought tax free. The State Board Of Equalization is much nastier than the IRS or Franchise Tax Board. Mess with them and they'll take your house yesterday!

(Answering your question partly) It should and probably must be Depreciated over many years (7, 10, 14, not sure what year class photo equipment is these days), never Expensed in one year. Film, Chemicals, Ink, Paper, Thumb Drives, Blank CD-R & DVD-R's can be Expensed as used in one tax year.

I'm not an accountant, but I used to do my own tax returns when doing photography during the 1980's.

With Income Property, Depreciation, Capital Gains (on our Investments), tax returns have gotten too complex for me to begin to do myself so I have a pricey Accountant do our taxes these days.

You should consult a tax accountant and or read thru the forms and guides on the Federal & your State income tax sites. The depreciation is certainly tabulated and calculated on your own forms (spread sheets) and only the final number(s) entered on a Schedule C. There is likely a form or schedule for a home photo business like there is for income property for individuals. Again you'll have to research it and find the needed information and sheets. Hint, use the price you paid for your equipment when you bought it, not ever it's current retail or wholesale price. And the IRS expects you to stick with your values unless you have good reason to change it and can document say an incorrect Base or Initial Value. A bummer is you basically loose depreciation not taken that you could have in previous years (say for equipment you had before starting a business) I'm not even sure of the terms they use today. Good luck! But don't do it. Just enjoy photography unless you are really a pro or an employee doing photography for someone else.

lamiaceae Loc: San Luis Obispo County, CA

Good point, I'm giving him the benefit of the doubt for now. A tax accountant would be in order. ;-)

lamiaceae Loc: San Luis Obispo County, CA

Yes, just like auto use for a business, or a claimed home office, the government will watch you like a hawk!

BeachLady Loc: Surfside Beach, SC

Thanks for all the replies! I have a marketing business, so it is for business use...I was just having trouble spotting a place to list the equipment since it needs to be depreciated.

lamiaceae Loc: San Luis Obispo County, CA

That, separately. your own forms as I recall. There is a IRS book on running a small business, don't recall number, 454, 405, 4xx or 5xx something I think. It has been decades.

djlouden Loc: Ocala, Florida

Here is one page I found. http://www.inbeautyandchaos.com/5-tips-photographers-help-get-tax-time/

In a nutshell, cameras are like computers, depreciation over 5 years. You also have the option with certain limitations to take a 100% depreciation using the 179 deduction.

If you have a very complicated return, consider a professional. Not a street corner variety but a true accountant that does tax work as a job.

Happy Shooting (and tax return too)

DirtFarmer Loc: Escaped from the NYC area, back to MA

Many years ago when I started the farm I hired a local accountant to do the taxes. At first it took some effort, but he was able to guide me to keep the proper records. It cost about $300. Since it was a business expense (otherwise I would do my own taxes) I take it as a deduction. My business is a DBA (me Doing Business As the farm) and my personal taxes are mixed in so I take only a portion of his fee for the business tax preparation.

If the IRS has questions about my return he is there to help out. The IRS has never audited my returns but it has pointed out some problems with other filings (such as SS/Medicare witholding for employees). My accountant was there to help me with those problems also. The few times I tried to work it out with the IRS myself, it was certainly possible to do it on the phone, but when you call them you can expect to be on hold for 15-30 minutes before someone can help you out.

On the whole I consider hiring an accountant a valid and useful business expense.

jerryc41 Loc: Catskill Mts of NY

You're not going to find a line called "Cameras," so just find something appropriate, like Equipment. Businesses use thousands of different things, but each one can't have a line of its own.

Depreciation on a camera isn't going to save you much in taxes. That would be better for something like a car. Whichever way you go, be sure to figure out the business/personal use ratio.

sb Loc: Florida's East Coast

Schedule C is where you deduct expenses and report income from a home business that is not incorporated. If you are incorporated you get into Schedule K and for THAT you better get an accountant!

Many of the comments here are incorrect. You do not have to be incorporated or have a business license to use a Schedule C. Anyone who earns money either through 1099 forms or independently (a photographer, a nanny, whatever) needs to report that income on a Schedule C.

You CAN use equipment for your business and your personal enjoyment, but if you do that you should be able to some how document the percentage that is business expense. Like with many things IRS, you can guestimate it, but if you get audited - good luck with that. You can now expense a lot of equipment rather than depreciate it. I think it is like $10,000 or so. And anything that is strictly business can be deducted - say, if you have a studio in your home that is for business, you can deduct the percentage of rent, electric bills, etc, based on square footage - but realize that a home office deduction ramps up your odds of being audited. You easily can deduct car expenses when you travel to a shoot, etc - but that should be well documented.

Do you have to be a "professional" to use Schedule C for your photo activities? NO! The last I read the IRS feels that you must actually generate income within three years on Schedule C activites, or else they will consider your activities a "hobby". So if you want to deduct your new equipment and the safari to Africa, you better be selling a lot of prints!

It can be very valuable to use a Schedule C: if you also have a "regular" job, having a side-line with Schedule C income allows you to deduct things you could not ordinarily deduct, such as self-employed health-insurance premiums and business expenses that apply to both jobs - if you are employed but have to pay licensing fees, get continuing education, etc., that is not covered by your employer, you can only deduct that above 7% of your income. With Schedule C income you can deduct all of it.

RSPB Loc: New York

This is the best response yet on this subject. Go see a tax professional.
I have 11 years experience as a paid tax professional. Expensing rules have changed drastically recently , but you DO have to depreciate this asset. The amount you claim on this years tax return will depend on a lot of different factors and choices. I would not presume to give you advice on line unless I saw your whole situation.

joehel2 Loc: Cherry Hill, NJ

The basic rule for a small business tax entity that has the appearance of a hobby is that it must show a profit within three years.

Fat Gregory Loc: Southern New Jersey

179 take it all in year 1 but be prepare for an audit 2 to 3 years later!