Five years is good, but you actually want to hold on to all tax documents for at least 7 years. You have three years to ammend a tax return to get back more money, but they have 6 years to come after you if you owe more. If for some reason the IRS suspects fraud, there is no limitation on how long they have to come after you.
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From: artshow_photo@yahoogroups.com [artshow_photo@yahoogroups.com] On Behalf Of michael cothran [michaelhcothran@comcast.net]
Sent: Tuesday, December 14, 2010 2:55 PM
To: artshow_photo@yahoogroups.com
Subject: [artshow_photo] Re: Newbie question re Federal Income Tax on startup photography business
To keep it fairly simple, you can deduct any expenses related to your gallery/consignment sales. But you also have to add the income received from any sales to your reported gross income.
Expenses would include materials used in the production of your photography - supplies, services, equipment, and mileage to start with. Expensive equipment may have to be depreciated over a few years. Expenses could also include miscellaneous things like appropriate magazine subscriptions, postage (if you ship), office supplies, etc.
Best to keep it simple to begin with, and save ALL receipts for five years.
Michael H. Cothran
--- In artshow_photo@yahoogroups.com<mailto:artshow_photo%40yahoogroups.com>, "henderson" <hdhobos@...> wrote:
> My question concerns Federal Income Tax. What can I legitimately deduct on my taxes this year and in future years? What do I need to do to insure that my deduction will be legitimate if audited?
>
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