Expensing Camera Equipment, Questions for any Tax Expert Etc

Joined
Jun 4, 2005
Messages
128
Location
NJ & MD
Hi folks,

First off, I'm not sure if this is the right place for this question. If not, moderators please feel free to move this thread.

Anyways onto my question. I was speaking with someone I know who is the head tax guy at a large local company. He suggested I may be able to expense the equipment I've purchased this past year since I use it to generate income. My situation is a little odd, though, so I was hoping for any advice on this.

I'm a staff photographer at my university paper. I work there during the school year and get paid for all my work. Furthermore, the paper is not actually affiliated with the school. It is owned by a completely independent group that owns a few smaller papers. During the summer, I'm shooting freelance for some local weekly papers, so technically I'm considered self-employed or a contractor or whatever (?). Now, I'm aware that the IRS doesn't like anything being expensed if it is for hobby. The fact is, though, that at least 85% of my camera usage (or maybe even more) is strictly professional and for profit. In addition I purchased my D2x specifically for paid usage (although it won't be used only for that, work was my primary motivation to take the plunge).

Now up until this point it seems to work out. I'm worried, however, that expensing a ton of $$$ in gear and showing less $$$ than that in income from photos might seem fishy. (I use my full time summer job to pay for gear primarily)

I guess my question is how do I document and show the professional of use my gear? If I were audited, how would I prove that my D2x and other equipment was not purchased for hobby?

If in doubt, I probably won't expense it, but it seems like a viable option, and one that is rather beneficial for a college student like myself.

Anyways, thanks for the help guys.
 
Joined
Apr 5, 2005
Messages
909
Location
Fayetteville, TN
Hasn't been a problem expensing and showing a loss the first yr or so. I assume you would also claim the income. In these times you may be able to expense the whole thing the first year.

As to an audit. just show them that coolpix or olympus point and shoot you use for hobby as I'm sure you use the D2X full time for business.
 
Joined
Jan 25, 2005
Messages
994
Location
Alabama
I asked my tax guy the same question, and he told me essentially the same thing that Greg said.
 
Joined
Apr 21, 2005
Messages
3,625
Location
Houston, TX
I'm also a bit curious about this. Exactly how much income do you have to bring in before you can start taking deductions without raising red flags, and what exactly can be deducted?

I haven't seriously pursued making money with my photography yet, but I've been considering getting into the stock photography biz as well as other opportunities that might arise (portraits for a friend of a friend, etc). I'm not looking to quit my day job or even come close to making enough money to live off of, but even bringing in a few extra dollars would be nice, maybe to help pay for my addiction. :)

It occurred to me that in this case I might be able to deduct not only equipment purchases, but even travel expenses (if the trip was for building a stock library). But I just don't know how risky these types of deductions are if it's not your "day job". Naturally I would talk to a tax accountant before acting but I was just curious if anybody else has experience with this type of situation.
 
Joined
Apr 30, 2005
Messages
145
Location
SF Bay Area
How do you report your income?

If on Schedule C, then your equipment purchases may be deductible.

Remember, anything in the tax code usually starts with the word "generally."

My background...

Preparer of Tax Returns since 1984.

My wife is a CPA.
 
Joined
Mar 31, 2005
Messages
14,461
Location
Toronto Canada
In Canada, expensive equipment is written off over a couple of years, not just the year of purchase so this will easily offset income. The income tax people only get a little itchy when there is no hope of your income increasing. I'm still writing a loss each year as far as photo income against equipment.
Don't forget all the other things: like research & professional development (photo tutorials, courses, etc), all software and plugins, transportation, communication, in other words: ANYTHING that you pay for that assists in generating income.
 

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