Filing Taxes for Part-Time Photography Business

dbruno

Hi - I'm getting a call from Turbo Tax for some advice, but I'm looking for whatever advice I can get from people who earn money as part-time photographers, and how they handle taxes and deductible expenses.

Photography is not my full-time gig, but I had around 10 clients last year that asked for my W9, which means I need to claim it. When I simply added the income to my personal taxes, that income was taxed at 39%!!!. Turbo Tax asked if I wanted to upgrade to Small Business filing so I could put in expenses, I backed off because this isn't my main source of income. I am not "incorporated", so I don't know if I should be filing something separate. These are some of the things I will be asking Turbo Tax when they call.

I had a bunch of advertising and equipment costs in 2016, travel, etc. If any part-timers out there can give me any advice about what is deductible, depreciation on equipment, etc., thanks in advance.

Dave

Neil vN

You're going to have to talk to a CPA. 

rs_eos

First, the following only applies US Federal taxes.  Disclaimer: I am not a CPA, but I have filed my own taxes for almost 30 years and what I do is outlined below.  But, as Neil said, contact a CPA to be sure.

I also have a full-time job.  My side home software business is a sole proprietorship (DBA; Doing Business As).

Having said that, any business classified as self-employment (e.g. a side business) requires you to file Schedule SE (self-employment tax).  It doesn't matter how much you make; you must file.  The amount of tax paid will depend upon how much social security tax you've paid into for your full-time job.   Furthermore, each separate business you run must have its own separate Schedule C (loss or profit from business).  If I ever add a side photography business, that would be a second business and therefore I'd file two Schedule C forms.

Schedule C outlines all your gross/net income, expenses, etc.  Note that there are rules for businesses in terms of profitibility.  I don't yet do any side work in photography since that would be nothing but losses at this point.  You're only allowed to claim so many losses in a row.

Finally, depending upon other factors, you may choose to also file quarterly estimated taxes.  For me, I have a formula I use that takes my extra home business income and computes federal and state taxes for the quarter.  I send in those payments each quarter.  When filing my yearly taxes, those payments are then applied.

dbruno

Hey, Guys - It looks like a Turbo Tax product will work for me. I can file my personal and side-business tax returns in one lump. Someone in support walked me through it. I was able to claim what I thought I could claim, and brought my tax liability way down.

Dave

Trev

good to hear Dave.

we have to file a BAS (Business Activity Statement) every 3 months and then pay the tax in advance if you earn over $87,000 (only if you have a registered ABN - Australian Business Number) here in Australia.

If below, you just file normal time once.

dbruno

Hi, Trev - Nice to hear from you! My concern was that, being a full-time employee for a company, if I were to claim business expenses, it would look as though I was claiming them for that work (which there are none) instead of the part-time photography. The Turbo Tax support person gave me some great help, and really it's just one more form, and all expenses would be for the part-time income. So I'm all set, but I was concerned.

The good news? I have income from part-time photography that I have to consider. Could be worse, right?

Dave