Saturday, January 15, 2011

Tax and Bookkeeping Help for Photographers {16}

It's my least favorite thing about owning a small business: TAXES! Of course I always dread having to gather all of the info, enter receipts, and organize it for our accountant... but over the years I've found a system that works well for me, and I'm happy to share!

Whether you're just starting out with your photography business in 2011 or 2010 was your first year and now it's time for last year's taxes, these things should help:

Step 1: Try and Organize Your Bookkeeping Early On

I would strongly suggest not waiting until the end of the year to organize your income and expenses. Once a week I enter in all of the payments I've recently received into QuickBooks, print a report of that week, deposit it into our business account, and then staple my deposit slip with the QuickBooks report to show that all of our income is accounted for. The IRS probably doesn't care if you lose some of your receipts and forget to report deductions... but they will certainly care if you don't report your income! QuickBooks is a great way to organize client invoices and payments... I love it. 

Step 2: Save Your Receipts For All Business Related Expenses

Some receipts for online purchases are avalailable online, (so I don't save those when they come in the mail) but I save all my receipts from the post office, office depot, walmart, etc. and organize them in an exel spreasheet in the following categories:

Merchandise (photos, albums, products, anything re-sold)
Equipment (cameras, lenses, flashes, computers)
Office Supplies (paper, discs, copies, batteries, mail)
Advertisement (business cards, brochures, website, wedding shows)
Dues & Subscriptions (professional associations, seminars, paypal, dropbox, online gallery)

*At the end of the year, don't forget to gather all of the receipts from your online places like your printing lab, B&H, Adorama, Adobe, Apple, etc.

Step 3: Find the Tax Deductions for Your Photography Business

In addition to the obvious business expenses, don't forget about these things that will help you when you file your taxes:
  • Track automobile expenses. I personally just track the mileage I travel for photography purposes and my tax guy deducts the government rate per mile (around $0.50)
  • Track your expenses while on the road. (like food & hotel)
  • If you work at home like me, you may deduct a percentage of your housing costs (mortgage, water, electricity, insurance, etc.) based on the proportion of the house that is used solely for photography. (You can't deduct the expenses for both an office at home and elsewhere, such as a studio.
  • You may deduct the cost (or a portion of the cost) of a phone line for your business, and internet for your business. 
  • You may deduct your accountant and attorney fees that support your photography business activities

Step 4: Prepare a Profit and Loss Statement for Your Photography Business
Here's what mine looks like!

keep great records of your photography income and expenses and make the most of your small business!!

Want to join me in this journey of 100 blogs in 100 days? Amanda Laplante, Kira Baron Photography, Mica Sansaver Photography, Nickles Photography, and Garden Gates Photography have. Email me if you're taking  the challenge as well!
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1 comment:

I'd love to hear from ya :)