Tips to Make Tax Season A Breeze
This year has been full of ups and downs for me, but overall, I've made some serious moves in my career as a freelance photographer! With the end of the year approaching, I wanted to share some tips that helped me succeed this year. Hopefully I can help some other photographers do the same in 2018!
It's probably too late to start following these tips for this upcoming tax season, but this is something I really focused on all year in order to make the most of my tax return!
create a business account through your bank (or go through paypal)
Having a business account linked to your bank is more convenient if you want to link your account to an app like Quickbooks, but there are a lot of steps involved in setting it up. Paypal business is super easy and just as convenient! You're walked through the entire process and they even give you the option to accept payment through paypal via your website, the paypal card reader, online invoices or on eBay. You can also order a paypal debit card to use for all your business spending!
keep all business and personal expenses separate (and save your receipts!)
This is why it's important to have separate accounts! In order to avoid confusion, tax fraud, or audits, it's important to have one account strictly for business purchases. This is things like equipment, monthly fees for website hosting, editing software, hiring second shooters, etc.
know what you can write off
As a photographer there is a lot you can write off on your taxes that you might not know about!
- Business Expenses - All your equipment can be written off as a business expense! This includes camera bodys, lenses, flashes, batteries, SD cards or even things as small as prisms or lens hoods! All editing software that you've purchased can be written off too! So if you pay monthly for Adobe products or purchase other photographers presets, you can write those off to make some money back!
- Advertising - Your personal website counts as advertising and can be written off each year. This includes domain registration fees, web hosting fees, purchasing a template, paying for a web designer, any plug-ins you add to your website, and paying an artist to design a custom logo! In addition, any stickers, merchandise, or online ads you've purchased count too!
- Education Expenses - Any workshops, seminars, conferences, books or magazines you've purchased to improve your work as a photographer can be written off as education expenses. If you're a music photographer, you can even write off shows you aren't hired to shoot but take photos to practice, as long as you paid for your ticket and save the stub.
- Business Productivity Tools - Believe it or not, you can write off your smartphone and data plan as a business productivity tool! If you use your smart phone to read articles about photography, watch videos about photography, call or email clients, manage social media or blog posts, you can write off a percentage of it!
log your miles
If you frequently travel for shoots or consultations, you can write off your mileage as a vehicle expense! In the state of California, you can be reimbursed about 54 cents per mile driven for business purposes. So keep track of every mile you drive to and from a location shoot to get a good chunk back!
create invoices to keep track of payment
Having clear invoices make it easy for clients to pay and keep track of their expenses and counts as a receipt for your incoming business expenses!
don't forget to pay quarterly taxes to avoid paying a lot in April
Since you don't receive paychecks like at a corporate job, the government won't be taking money from you every week. To insure they don't take it all at once in April, pay your taxes quarterly. Click here to determine how much you need to be paying and a little more information (since I'm clearly not a professional.)
Find an app to help you keep track of all this!
I've been using Quickbooks all year to keep track of my expenses. You can log your mileage, log and categorize spending and even create invoices! It's much easier than keeping it all on paper!