Q: I’m buying new gear for my photography business all the time. Since these are related to my work, should I hang on to the receipts for tax time?
A: In honor of National Photography month, we are once again devoting this space to help our photographer friends with their business finances.
Knowing your financial status means being organized. Before you have a penny come into your business, you can set up systems that will allow you to track what’s coming and going out. Even a simple spreadsheet can easily help you organize your finances.
One thing that motivates business owners to follow accounting suggestions like nothing else is by letting them know that there is the potential to get money back. Ahem! When nothing else works, the word “deduction” often does. While the filing deadline for 2018 recently passed, it’s never too early to get organized for next year.
As your work gets set to hit into high gear with gorgeous summer weather, keep these things in mind to help you organize your finances overall and make tax preparations a breeze.
While you may not need a formal office to run your business, photographers have a significant investment in initial expenses. As you know, good cameras and equipment aren’t cheap, and your costs can quickly amount to up to $10,000 in startup costs.
Just because you’re starting a business doesn’t mean that you get the very best of everything now. Good things come to those who wait! Get the lenses you need to do your job well. The ultra top-tier, top of the line version can wait until your business is steadily earning income.
Equipment like cameras, lights and lenses that last more than a year are considered a capital expense and can get you a tax break. Hang on to those receipts, my friend
Keep Tabs on Your Driving
How much time do you spend in your car,
If you’re going from one job to the next? A lot, I’m guessing. You need to keep track of your driving in order to submit your mileage for your taxes next year.
As with many things that can help you with your accounting these days, there’s an app for that. Several, in fact.
If you’re already using Microsoft Office, then MileIQ is a great option. This is a handy list that evaluates four other options that could be a fit for your business.
Networking and Memberships
Many business owners are members of professional associations to help them keep up on education, training, and networking opportunities. Your associate fees and dues can be deducted. Trade magazines also can be deducted so if you subscribe to any for tips and inspiration, be sure to hang on to your receipt and account for it come tax time.
Be sure to consult with a tax accountant for specific questions about your taxes, as they are the best source of information and will be abreast of any changes in the tax code.
By thinking about your taxes now and creating some good record-keeping system, I can promise you that you and your accountant will be happy you did come early 2020!
Photo by Jamakassi on Unsplash