Vblogger offers Tips on Avoiding Common Photography Tax Mistakes
April 15th is almost upon us. If you finished your taxes then you're a step ahead. If you're not, it's definitely worth reviewing some of the more common tax issues that photographers run into. "The Tax Ninja" Michael T Whatley goes into detail in his video (linked below), but we'll run down the basics here.
Sales Tax - Depending on what state you live in, you may have to charge sales tax. It's not just a service after all, you're giving the customer goods
Receipts - If you're an independent photographer, you absolutely need to keep your receipts. Whatley advises just keeping separate personal and business bank accounts for a simple way to keep track.
Writing Off Meals - Just because you had to go a few towns over to get some shots doesn't mean you get to write off your meals. There are very specific rules for write-offs, but a simple guideline is to ask yourself whether the meal was necessary for business.
Forgetting the Self Employment Tax - If you're new to freelancing or self employment, it's important to remember the self employment tax. Your employer normally pays for a piece of your taxes, but now it's all you. Expect 15.3% to come out of your total income for the year.
Writing Off Rent - If you use a part of your home as an office or workspace, you can write that part off, but don't go trying to claim the whole thing or you'll have an audit on your hands.
Being Disorganized - Tax preparation costs money, and it costs a lot less money if you can save the preparer time. Having your receipts, a separate business account, and even a vehicle milage log can save you a bundle.
Using the EZ Form - By using the EZ form, you're missing out on some nice extras that you could be getting. For example, the Making Work Pay tax credit essentially gives you $400 for having a job. The downside? You won't find it on the EZ form.