Taxes- Why save receipts? - DPChallenge Forums

Canon EF 28-135mm F/3.5-5.6 IS USM

02/05/2006 12:27:08 AM · #1

I am sitting here sorting through all of last years receipts for everything we bought. (Which is WAY to much..lol)

We were told to save our receipts for tax time. (We owned a home) What is the point? What are the tax accountants going to do with them all?

Jenn

psychephylax

Canon EOS-5D Mark III

02/05/2006 12:35:35 AM · #2

In case you get audited :)

RayEthier

Canon EOS-5D Mark II

Canon EF-S 18-55mm f/3.5-5.6 USM

02/05/2006 12:41:48 AM · #3

You use them sort of like a salt... to keep the leaches from the tax department away from you.....so they can't suck you dry.

Ray

02/05/2006 12:46:40 AM · #4

We haven't actually taken them in yet to do our taxes. So my question is more of what kind of deductions do you get by saving receipts.

Thanks :)

Spork99

Canon EOS M6 Mk II

Canon EF-M 22mm STM Lens

02/05/2006 12:50:04 AM · #5

Depends, but for tax purposes, I think you really only need to save receipts for stuff that you are going to claim as a deduction. Now there are lot of different things that you can claim so, maybe it's better to save everything.

02/05/2006 12:52:08 AM · #6

Originally posted by Spazmo99:

Yeah, we saved just about everything...LOL Hopefully it will be worthwhile in the end.

Jenn

rex

Canon PowerShot SD780

02/05/2006 12:58:36 AM · #7

get Quicken and print your register evey year...that is all I do

Niten

Canon EF 24-70mm f/2.8L USM

02/05/2006 01:06:15 AM · #8

Total income-receipts=less income you pay taxes on
You have to be trying to make a profit though not just trying to pay for your gear. Otherwise you can only write off as much as you acctually made in photography. btw I'm no tax dude but I know one ;)

Originally posted by JRalston:

We haven't actually taken them in yet to do our taxes. So my question is more of what kind of deductions do you get by saving receipts.

Thanks :)

Prof_Fate

02/05/2006 01:18:18 AM · #9

You have income. YOu get a standard deduction for being a person, one for each dependent child, etc. Lets say you make $50,000 and get $6,000 for each deduciton and have 4 of them, so that is $24.000. The difference is $26,000 - that is what you pay income tax on.

BUT - you can itemize you deductions instead of taking the standard deducitons - things that can be deducted are: mortgage interest, property taxes, state income taxes, some school loan interest, and a few other thinngs (charitable donations, medical expenses ABOVE 10% of your income, etc) See an accountant for the details.

Now then, if you have a business you run from your home, you get all those above deducitons AND deductions for your home office - you can deduct part of the mortgage and interest, mainteneance and repair, propety taxes, utilities (note: some of this is actuall deducted TWICE!). You can then deduct the things you sold (prints, frames, etc) and can depreciate things like cameras, computers, printers. You can also deduct business expenses (advertising, phone, internet, DPC maybe...). The more you deduct the less you pay in taxes.

You need the receipts to prove those deducitons. You can say you bought a 1Ds Mk2 and 500F4 lens for $15000, but the IRS may one day want you to prove it, so you need the receipt.

Niten - you can take the losses and write them off against your other income as long as the biz is not a corporation.

02/05/2006 01:28:03 AM · #10

Well, I did not have a business license or tax id number. I DID do some work for a magazine last year and they sent me a 1099 form. I only made about $1200 from them. I did make some money from online sales, but the never send me any forms.

I DID spend WAY more on camera gear than I made and I have all the receipts. My husband is the one who brings home the bacon.....I am a stay-at-home-mom who picks up a few bucks here and there from photography.

I am so confused this year. This will be are first time going long-form. We also have some moving expenses that the military did not cover so we plan on deducting that as well.

Usually I have my refund by the end of Jan/ beginning of February. I am just now starting all the stuff for this year...LOL

rex

Canon PowerShot SD780

02/05/2006 01:29:27 AM · #11

I just pay the accountant $100 to handle my taxes

Prof_Fate

02/05/2006 01:57:05 AM · #12

Best bet is to pay an accountant!
anyway, ANY income has to be legally claimed as such, whehter you get a 1099 or not. Sell a widget on ebay for $500 and you legally have to claim $500 as income. BUT you have the paypal and lisitng fees etc, so you offset the income with those deductions. You pay tax only on the net amount.

Now it gets tricky - you have to have the internet and a computer to sell that widget on ebay. But deducting all that expense against a single widget sale is gonna raise a red flag over at teh ol' IRS. Tax fraud, tex shelters, you've heard the terms i'm sure.

Schedule C is the one you need to fill out. Pub 535 is some light reading you'll want to be familiar with.

Ther is a pub on what the IRS considers a 'hobby' and a 'business' - easy reading here

The first year I figured it myself, i figured i owed $800. I went to a CPA, paid him $80 (then) and he got me $600 back. last year he got me $4400 back. His services are tax deductible too! I might cringe at writing him a $180-200 check, but it's been well worth it.

Canon EF 70-200mm f/2.8L USM

02/05/2006 02:04:33 AM · #13

Wow, thanks for the links :)

Say I made $2000 total....my husbands taxable income is $35000.....and I have $10000 in PHOTOGRAPHY deductions. We file married filing joint. Can my deductions cut into his income?

I think you are right.....we just need to hire an accountant. We may be able to do it with base legal.....but I am not sure if they do returns this complicated..LOL

Prof_Fate

02/05/2006 02:22:37 AM · #14

Yes, your deductions (aka business LOSS) can be put against his income if you file jointly.
BUT if you bought a camera(or other durable good type thing), the IRS has a chart/list that says how long it'll last. Say 3 years. So you take 1/3 of the purchase price as a dedction for 3 years. This is called depreciation. This is where an accountant gets to earn his money - say you got a 20D in 2005, for $1500 and can depreciate it over 3 years. That' $500 a year. BUT part way thru the third year you sell it so get a 1Ds and you get $600 for it on ebay.You gotta take the $1500-600, and then you depreciated 1000 of that over the first 2 years...not sure what happens now! You depreciated $1000, but it only cost you $900 in real dollars. See, isn't this fun?
it's why i go to an accountant!

Ristyz

Apple iPhone 12 Pro

02/05/2006 02:35:51 AM · #15

QuickBooks!!! I just put it all in the computer and send the file at the end of the year to the accountant. I do keep all receipts for the necessary 4 years in case of audit. I make sure I add all my office space deductions in since I have a home office and I count EVERY MILE in a little book for any travel that is biz related. It's amazing how much deduction you can get back from your mileage!! Last year it was worth over 4,000 bucks! (Oh, yeah, the biz is photography.)