self employed tax deductions?

hello this is kind of a loaded question but hopefully someone can help me out.

i am considering using turbo tax this year. i have been a student most of the year, i have held 2 part time jobs and have done some freelance work as well.

i have invested a considerable amount of money into starting my own business.

investments such as:

computer hardware
5d
lenses
lighting equipment
cases and bags for equipment
explorer xt battery pack
web hosting

i however have not yet made much money on my own, can i still file for deductions with these expenses? i do have all my receipts to prove everything i will deduct.

how much money do i have to make before i can deduce them? and if i cant deduct them this year if i make more money can i deduct them next year?

i hope you guys can help me.

oh one more question, if i can deduct those business expenses i should probably use turbo tax home and business correct?

So you're essentially a full-time student with two jobs and you freelance?

Do yourself a favor and hire a professional. You'll be glad you did...

you need the advice of a qualified tax preparer

i certainly think that would be the best option but my tax guy has raised his rates and im looking for alternatives. I also got married this year and will be filing together with my wife, it gets more and more complicated haha

i appreciate the advice though

Bonus: The cost of a tax preparer is deductible...

The problem with Turbo Tax is that there's no room for interpretation. I've been self-employed for most of my adult life and the couple of times I tried doing my own taxes or using software ended up costing me high hundreds worth of missed deductions because neither I nor my computer could be "creative" with where things went.

I'm not advocating cheating but there are situations where us mortals simply may not know that "X" can go under this column at a certain percentage but it can also go over there for a higher percentage.

Get someone that does taxes for other photographer and knows the tax laws for photographers in your state. I have a great accountant and has saved me so much not only in $$$ but in piece of mind. We pay her monthly because she handles all of out biz and personal taxes and shes worth every nickel

I'm no tax expert, but unless you've officially launched your business--gotten the necessary licences or permits your locality or state requires--and since you haven't made much money, I think you'd do better this year idenfying your photography as a money-making hobby. This especially true if you made retail sales and were supposed to be sending collected taxes to the state.

You can still make some equipment deductions as a hobby (which don't matter anyway unless you're earning money with it), but it won't put you on the IRS's clock on how long you can lose money as a business before they audit you or push you back into hobby status anyway.

How can you make equipment deductions for a hobby? Last I heard the IRS is expecting this hobby to produce taxable revenue within a 3-5 year period. I'd love to write off the $10k I spent last year. I am seriously considering tying photography to engineering (produce software plugin's, worked on a scanner, etc) in order to get the hobby aligned with my main occupation.

well its definitely not a hobby i am lead photographer (not that that means anything really) at a photo studio, i am certainly not a business by any means but self employment is different than being a business.

oceanbeast wrote in post #11711934
well its definitely not a hobby i am lead photographer (not that that means anything really) at a photo studio, i am certainly not a business by any means but self employment is different than being a business.

I have been self employed since the early 80's with a brief spell for 3 years as an employee in order to get into the Silicon Valley. I have no licenses though I should because technically I am supposed to pay local taxes as a income based identity. I have not been audited in 20+ years of self employment.

If you are running a studio you have every right to deduct business expenses however I still recommend a tax preparer to make sure you are getting the most from your investment. My tax forms are fairly long and I would be hosed if I had to figure it out for my self. I list my expenses and operating costs and my accountant logs deductions and generates returns.

Ocean,

As a CPA, I would concur with the other posters concerning having a professional do your taxes.

As for the hobby thing, when I was in school, the basic principle on hobbies was expenses limited to income - so I really doubt that is what you are looking for. However, you could claim self employment, show full income and receive full deductions and pay 1/2 self employment tax. The loss would offset elsewhere, meaning your personal income (I believe - I have not done taxes in a couple years). Keep in mind though, you best start generating some income over the next year to substantiate being a business or the IRS will begin looking. If this happens, they can also look back and could replace the loss offsetting personal income with hobby income and then you will owe the difference - PLUS INTEREST AND PENALTIES.

$3-400 is a small price to pay to get it right the first time and have little to worry about.

huntersdad wrote in post #11712057
Ocean,

As a CPA, I would concur with the other posters concerning having a professional do your taxes.

As for the hobby thing, when I was in school, the basic principle on hobbies was expenses limited to income - so I really doubt that is what you are looking for. However, you could claim self employment, show full income and receive full deductions and pay 1/2 self employment tax. The loss would offset elsewhere, meaning your personal income (I believe - I have not done taxes in a couple years). Keep in mind though, you best start generating some income over the next year to substantiate being a business or the IRS will begin looking. If this happens, they can also look back and could replace the loss offsetting personal income with hobby income and then you will owe the difference - PLUS INTEREST AND PENALTIES.

$3-400 is a small price to pay to get it right the first time and have little to worry about.

Great advice, I don't make a money move when it comes to biz without consulting my accountant first.

Don't full-time students get one he¡¡ of a tax break?

thanks i am going to look for someone more well versed in these matters as i probably will get it wrong.

I have a masters in financial accounting....I normally do our taxes....last year we had some unusual circumstances affecting our taxes where I thought we were going to owe the IRS...it turns out we got a refund and it was a rather big one....

our CPA/tax guy was a former IRS tax guy....we paid him $2k to do our taxes....our refund more than covered it....it was the best $2k we ever spent....mainly because I didn't know the about the very very complex tax laws and interpretations involved....

go see a pro