This post is written by Josh Zwig, CA and member of the Wave Pro Network.
Smile! Pursuing your passion in photography and starting a business can be a truly rewarding experience. Whether you’re just starting out or are a seasoned paparazzi, here are 3 tips to ensure you’re getting the most out of your return:
Time your equipment purchases
For tax purposes, equipment purchases such as cameras, lenses, lights, etc. are considered fixed assets. Unlike an expense where the full amount is deducted immediately from your income, fixed assets are depreciated over time. The thing is, it doesn’t matter when in the year you purchase the equipment – whether you buy it in January or December, you’ll still get to deduct the same full-year depreciation expense.
Record your travel
If you’re shooting clients all over the city, the travel costs can add up. But keeping track of each and every gas, insurance, and maintenance receipt can be a real headache. To keep things simple, the CRA and IRS have a standard mileage rate that you can use to calculate your total travel costs. Just take your total kilometres/miles driven for business, multiply it by the rate and you’ve got your travel expense.
Track your home expenses
When you’re not behind a camera, chances are you’re in front of a laptop touching up the photos from the shoot. If you’re doing some work from home, you’re entitled to deduct a percentage of your home expenses. The percentage is generally based on the total area your workspace occupies in your home. Roughly 10% of total home expenses is a reasonable estimate but it may be larger if you use your home as a studio as well.
The information and tips we’re sharing in this article are meant to be a starting point for your year-end tax prep, so you can be informed and feel confident when working with your accountant. Be sure to check with a tax expert in your country or region for any specific advice you need, as each business (and tax district) is different. As our lawyers would say: “This article is for informational purposes only. It should not be considered legal or financial advice.”