Re: [artshow_photo] Re: Newbie question re Federal Income Tax on startup photography business

You better talk to an accountant, I understand that business expenses,
especially if you aren't showing a profit, will raise the audit flag with
the IRS.

BK

"In photography there is a reality so subtle that it becomes more real than
reality."
----- Alfred Stieglitz

J Bryan Krämer North Florida, USA
photos at: http://pbase.com/photoburner
blog at: http://www.photoburner.net

On Tue, Dec 14, 2010 at 15:13, henderson <hdhobos@yahoo.com> wrote:

> thanks for the great info. i live in NV, which does have an income tax.
> However, if I sell thru a gallery, they charge and report the tax to the
> state. Do I still need to have a tax ID?
>
> I have spent quite a bit on frames, mats, and prints. If I understand you
> correctly, these are only deductible when I sell - so if I buy 100 frames
> and 100 mats, but sell 10 frames photos, I can only deduct the cost of 10
> frames and 10 mats (pretty much insuring that I will have a profit).
> Correct?
>
> Another question - I frequently do "photo tours" to a location. These
> tours are educational, as well as providing an opportunity to acquire
> images. Usually, I have to fly, not drive. Can I deduct the airfare? Can
> I deduct the cost of the photo tour?
>
> --- In artshow_photo@yahoogroups.com, Joseph Orabona <orabona_joseph@...>
> wrote:
> >
> > Save your reciepts. If you do get audited that's your proof. If you
> cannot prove it the deduction will be dissallowed and you'll have to pay it
> back plus penalities and interest.
> >
> >
> >
> > For most self employed people their biggest expense is milage. Make
> yourself a milage log and put everything in there. Driving to a art show,
> gallery opening, post office, location of a photoshoot, meeting with a
> client, walmart to buy supplies. Write it all down in your log. The IRS
> milage rate for 2010 is $0.50 per mile. It adds up quick.
> >
> >
> >
> > You mentioned not having a sales tax ID, do you live in a state that
> charges sales tax? If you do when you file your state return they may
> notice that you have sales but haven't given them their cut. email your
> state's department of revenue. They'll be able to tell you what you do and
> don't need to charge/pay sales tax on and where and how to pay. Also in
> many states having a sales tax ID allows you to not have to pay sales tax on
> purchases of supplies.
> >
> >
> >
> > As far as other individual expense. For the most part, if it's bought
> for the business, then you should be able to deduct it. So long as it is
> "both ordinary and necessary" it can be deducted. The only big exception to
> this would be things like mat board. You are technically in the field of
> manufacturing. Things that go into your finished product (mat board, ink,
> paper, bags, etc) are factored in under Costs of Goods Sold. Those things
> aren't actually taken as an expense until they are sold. So say you spend
> $500 on materials in 2010. You sell half in 2010 and the other half in
> 2011. You would recognize an expense of $300 in 2010 and $300 in 2011.
> >
> >
> >
> > I'm not a photographer, I'm an accountant whose girlfriend is a
> photographer. Let me know if you have any more specific questions.
> >
> >
> >
> > Joe Orabona
> >
> > Business Manager
> > Osgood Photography
> > Manchester NH
> > Joe@...
> > 631-327-7190
> > OsgoodPhotography.net
> > Facebook.com/OsgoodPhotography
> >
> > ________________________________
> > From: artshow_photo@yahoogroups.com [artshow_photo@yahoogroups.com] On
> Behalf Of henderson [hdhobos@...]
> > Sent: Tuesday, December 14, 2010 1:48 PM
> > To: artshow_photo@yahoogroups.com
> > Subject: [artshow_photo] Newbie question re Federal Income Tax on startup
> photography business
> >
> >
> >
> > I have just started selling my photographs, but plan to do more. I sold a
> few things at an arts & crafts fair, and have some photos on consignment in
> a gallery. I would like to focus on galleries/consignment, so I do not have
> to deal with tents, possible damage, sales tax, etc. At the moment, I do not
> have a Sales Tax ID or a Business License. I have had lots of expenses for
> printing, matting, framing, etc., as well as travel costs to acquire images.
> >
> > 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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