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06/18/2006 10:55:11 PM · #1 |
Hello Everyone,
I am finally getting a roll on. I have most of my portfolio done and finally feel safe to begin offering my services. Currently I have the Rebel XT. I would like to upgrade to at least the 30D. I know that to start the business stuff I need a tax ID number, but I am wondering how and what or if I could write a camera upgrade off as business expenses. Do I amoratize that? I would appreciate any help from someone that has experience with starting up a business, also any articles, etc. I truly appreciate it. I have a few books but they are kind of outdated :)
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06/18/2006 11:06:56 PM · #2 |
It would have to be amortized over 5 years probably... I have an 'official' business also. I had to get a tax ID number and a privilege license in north carolina...
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06/19/2006 08:03:16 AM · #3 |
Originally posted by jmsetzler:
It would have to be amortized over 5 years probably... I have an 'official' business also. I had to get a tax ID number and a privilege license in north carolina... |
Did you incorporate? Sole Proprietorship?
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06/19/2006 08:41:44 AM · #4 |
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06/19/2006 09:36:58 AM · #5 |
Go talk to a CPA. If you know this little about running a business, you will make costly mistakes. Spend a few dollars (it may even be free) and talk to a good CPA and he'll get you on the right track.
Here in PA - you have to collect sales tax on some things and not others, and to do that you need a state sales tax license. No other business license is needed. Some local towns will require one IF you have clients coming to your home or you have a storfront. You only need a fed tax ID if you have employees. till then your SS# works just fine.
some things are 'expensed' and others 'capitalized' - generally, if it lasts a year or less you expense it (office supplies, utility bills, etc) and longer lasting things are amortized over their lifespan (the gov't tells you what that is). Computers, cameras, cars, office furniture, that stuff.
You need to keep records, and you need to have categories - bus licenses, bank charges, utilities, phone/internet, advertsiing, travel, education, prof assoc's, etc, etc.
you need to track the mileage you drive for business - see the CPS for hte exact format and rules on this as it is usually a very big deduction (40c (it varies from year to year and even changes during the year) for every mile driven for work) There are 2 other ways to write off car expenses - see a CPA for what works best for you.
have a home office? See the CPA for the rule on it. If it meets the rules you get more deductions.
I am set up as a sole proprietorship. here in pa if your name is in the business name you need not file any paperwork (Perry Photography for example). Studio P would require a lawyer, state registration and ads in the newspaper of record (i.e. costly and time consuming). The state has quirks - Perry and Sons Photography requires teh state reg bit and ads, etc.
While you should have a business bank account, another benefit of a simple name is you can deposit the checks you get right into your regular account - saves you some money there too.
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06/19/2006 12:26:46 PM · #6 |
You need to talk to an accountant. I had thought photo gear was expensed over 7 years, but you could take a section 179 and count the deduction in the current year.
There are a ton of other non-photographic deductions and issues that you need to learn if this will be a business rather than a hobby. |
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06/19/2006 01:05:56 PM · #7 |
In January, I went and got my business license for this year, and last year.
When I did my taxes (well, I had them done by a friend who is an accountant), we added up all the equiptment I bought for last year and let Turbo Tax do it's thing. I think it was claimed for that year, and I cannot claim it again.
I don't use a tax ID#, I use my soc sec. That is the way my township registered it when I got my license.
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