Schedule C question - US tax question

Hi All,

Disclaimer: Yes, I have an email into my accountant am waiting a reply. Just posting to see what you all have been told.

I am filling out my first schedule C for my business. I am at a loss on what to do with my equipment purchases. I would think it'd go on line 13 but this exception listed in the instructions confuses me:

Where do I deduct my camera equipment expenses? I have large items to small items that are equipment and not supplies. Do I include in equipment the $1300 lens and the $20 wireless triggers? Or is the cheapie stuff listed differently? The instructions for line 13 of the Schedule C lists photographic equipment used specifically for your trade as an exemption. So it seems I would not have to do depreciation but that is strange to me.

So I am not sure what to do with the equipment costs. I'd like to just deduct it all as simply as possible. There are a couple of big items and the rest are all $250 or less (usually much less). Can I deduct it all under start up expenses and perhaps list it under Part V - Other Expenses.

Thanks in advance.

4562

Depreciation?

Good info here...

.

jecottrell wrote in post #16670565
4562

Depreciation?

Good info here...

.

Thanks. I have seen that article. The exception quoted above is what confuses me. It is listed under the line 13 instructions (where you would list the results of your depreciation on the 4562).

Yes, depreciation. You can opt to have it all at once or even it out over a few years. If you need, try using TurboTax Home and Business and just compare the sections (you don't have to submit or buy)

OK. Thanks.

So what does the exception mean?

NewCreation wrote in post #16670973
OK. Thanks.

So what does the exception mean?

It means that you don't list photo equipment in that section on your Schedule C, rather you use Form 4562 (Section V). The IRS splits that stuff out because it considers it as used for both business and recreation. If you ever pick up your camera and just shoot a quick picture of your family for your personal facebook then your camera and that lens are not 100% business use. A buddy of mine (filmmaker) intentionally had separate gear for business and personal use so he wouldn't have to track. If you use your gear for both then it's just like your car. You should keep a use log. (How many photographers actually do that? Not a clue, but if you want to be audit resistant you should.)

The first year or so of a new business you really should have a CPA do your taxes. If nothing else that will be the time the paperwork is the worst. Also, TurboTax and the like walk you through the process.

I'm a big supporter of using a CPA in general. It's an investment in your business. Keep in mind that in the case of a business your attorney and CPA are expenses.

Fernando wrote in post #16671788
It means that you don't list photo equipment in that section on your Schedule C, rather you use Form 4562 (Section V). The IRS splits that stuff out because it considers it as used for both business and recreation. If you ever pick up your camera and just shoot a quick picture of your family for your personal facebook then your camera and that lens are not 100% business use. A buddy of mine (filmmaker) intentionally had separate gear for business and personal use so he wouldn't have to track. If you use your gear for both then it's just like your car. You should keep a use log. (How many photographers actually do that? Not a clue, but if you want to be audit resistant you should.)

The first year or so of a new business you really should have a CPA do your taxes. If nothing else that will be the time the paperwork is the worst. Also, TurboTax and the like walk you through the process.

I'm a big supporter of using a CPA in general. It's an investment in your business. Keep in mind that in the case of a business your attorney and CPA are expenses.

Excellent. That makes sense. I was pouring over the 4562 form today. I will be getting some paid help from an accountant. I just like to know what to expect and how to best prepare the info for ease of communication.

Thank you very much.

You may be able to expense all the equipment (or the portion that is used for business) under Section 179. It is complicated and definitely let the accountant deal with it.

http://www.irs.gov/pub​lications/p946/ch02.ht​ml

Yep. 4562 and Section 179. Learn it. Better yet, use some Tax software and it'll walk you through it easily.

John

Thanks John and Liquidity. We used turbo tax home and business. Glad to have that off my "to do" list.