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Old Apr 21, 2004, 6:26 PM   #1
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Default Can I count new camera as a business expense?

I ended up getting an extension on my taxes because I was told last week I could write off film expenses last year as business expenses (I'm a freelance reporter/photographer, and pay a Self-Employed tax). By that rationale, would I be able to write off my Minolta Z1 and accessories as a business expense? I would estimate 90% or more of the pics I take are for possible publication. TIA
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Old Apr 21, 2004, 7:04 PM   #2
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I'm not a tax expert, but I should think you would be better off if you have made some sort of a sale of a picture and have generated income or have evidence that you are about to generate income.

If the pictures are to generate income, and indeed do so, then certainly you can write off your legitimate expenses in producing that income. That would include equipment, film, travel, etc. However, if producing income is only a dream and it's really a hobby in practice, you could be subject to having it reversed in an audit and have to pay interest and penalties.

Technically, if you only use the gear for 90% business purposes, then you should only wirte off 90% of the cost. However, that's a little harder for the Feds to sort out.

Taking a deduction that they disagree with is not criminal. Failing to report income is.

Again, I emphasize, I'm not a tax guy, just a guy who pays more taxes than I want to.

Deane
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Old Apr 21, 2004, 7:15 PM   #3
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Thanks Deane. I have been paid for publication of some of the pictures and expect that to continue, while some have been published with no pay. I keep track of when and where the pics get published. I have the originals of all pics I've taken so if I needed to I could calculate just what percent are business-related and what percent are for personal use, though some pics like test shots could be a bit murky.
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Old Apr 21, 2004, 8:15 PM   #4
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I should think test shots would be business deductions. It's necessary to test things for proper business operation. What would a big company do that purchased a new camera for thier publicity department. Run test shots if they're smart.

Again, I'm a laymen, but I think that if you're earning your living doing freelance writing and photography, that if you sell your photographs, or illustrate stories you write, you're on pretty safe ground deducting the tools it takes to earn that living.

The way I approach it, if I feel I could sit in front of an IRS auditor and present a reasonable story as to why it's business, I'm pretty safe. It's possible they may disagree, but that's all they can do. Then, I have to pay the taxes on whatever I deduct that they disallow, plus interest. This is pretty small potatoes in the IRS world.

Your odds of getting audited are low, and your chances of getting an auditor that digs very deep into how you use the camera are even lower, so long as you can explain what you do with it that's business. When you get in trouble is when you deduct it and have no business connection whatsoever.

Deane
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Old Apr 22, 2004, 8:53 AM   #5
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If you are a self employed reporter/photographer and use the camera in your business it is certainly a business expense. I've been doing a friends taxes for years who freelances for the news paper and also is an event and wedding photograper. We always deduct the cost of his cameras, lens, accessories in addition to film, developing, supplies, etc.

You should only deduct the portion of the cost that is business related however.
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Old Apr 22, 2004, 9:41 AM   #6
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About the only thing I can add - I'm not in the US, but do have a grad degree in accounting - is that deductions for self-employed like this are an area that is murky and is subject to abuse. I'm not saying you'd push the envelope, please don't misunderstand me.

What that higher potential for abuse means is that the tax authorities will flag such returns and score them higher. Audits are more likely the higher the score is.

Make sure you have receipts and can establish that you have a real business. Sometimes having returns professionally done will reduce the likelihood of an audit because a pro isn't going to lose their business pushing through a shady return, b) they know they'll have to deal with someone that isn't going to be overwhelmed by the tax code.
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Old Apr 22, 2004, 9:45 AM   #7
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Murphy,

I am self employed, in Britain, in the legal profession, and I have previously written off a Camera and an iPod for expenses. This i see as justifiable, as i use the iPod frequently for dictating, and i use the camera as a means of photographing evidence.

If you are self employed and Photography generates some of your income, then you DEFINATELY can write it off as expenses and claim the tax and VAT back. No matter how much of it is personal use - if it contributes to your income, it can be written off.

that's what i love about being self employed

Lome
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