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New tax overhaul: Huge boon for photographers?
  
 
oguruma
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p.1 #1 · p.1 #1 · New tax overhaul: Huge boon for photographers?


This isn't intended to be a political discussion, rather just to talk about the ramifications of the new (American) tax plan as it applies to photographers.

As I understand it, businesses can now deduct expenses in one year, rather than depreciating them over several years.

I think most accountants recommend deducting bodies, lenses, and computers over 5 years, though I had one accountant tell me I could get away with 3. Under the current (soon to be old) system if you purchased a $1,000 lens (for example), you could only deduct $200/year for 5 years. Under the new tax plan, you could deduct the entire $1,000 in the year you purchased it.

Either way, I think the implications for professional photographers are huge. It would seem that we could get away with affording more gear that we wouldn't be able to otherwise.

Now, you still have to be able to justify your purchases as being reasonable and necessary. You probably won't be able to get away with $15k/year year over year for a $30K/year photography business, but it might make it easier to afford that lens or computer that would make you more productive or effective.



Of course, no tax bill is ever really justification for purchasing stuff you don't actually need.



Jan 01, 2018 at 04:16 PM
kdphotography
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p.1 #2 · p.1 #2 · New tax overhaul: Huge boon for photographers?


Section 179 deductions are not new. Equipment has to be purchased (or financed) and put into use in the eligible designated tax year.

Other tax benefits of the new tax plan as pertains to smaller businesses will probably be helpful.




Jan 01, 2018 at 04:26 PM
mjc
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p.1 #3 · p.1 #3 · New tax overhaul: Huge boon for photographers?


Depends how the IRS decide to deal with sudden changes in individual's behavior. No idea. But be careful of increasing the probability of an audit.


Jan 01, 2018 at 06:06 PM
glort
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p.1 #4 · p.1 #4 · New tax overhaul: Huge boon for photographers?


oguruma wrote:
Now, you still have to be able to justify your purchases as being reasonable and necessary.


Geez, sure would love to be a fly on the wall during that conversation....

" Yes I know I just bought a new camera last year and have only done 6 weddings with it but you see, the day after the new model come out the old one ceases to be able to do the same job it did before and I need that extra ISO the new model has along with the other 6 features I'll never use because If I am still using the old model body 3 weeks after the new one has come out, what will my Customers say?

They will inevitably cancell my services and want their deposit back because as every gearhead shooter knows, it's not about the work you do, it's about having the latest and greatest bit of gear which is the only way you can make a creditable and acceptable image and not rip your clients off.

The Lenses?
Well as you can see on this chart, when measured on Million dollar equipment, this lens has 3 lines per inch better resolution than the old one and the chromatic aberration outside the sensor area is reduced .0027%.

No, you can't possibly tell the difference with the human eye and it's way beyond the resolution of a computer monitor or a photo printer to reproduce but I don't want to rip my clients off by using the old now sub standard equipment I was using happily and boasting about 3 years ago.
It is out of date and sub standard now the new model has arrived.

I NEED this new equipment to do my work as well as an antidote for my Middle life crisis and and declining function of my manhood.

With this NEW equipment, My booking rate will go up 600%, They will spend 3 times what they did before, refer me to 8 times as many people and I'll become the most famous and wealthy photographer in the whole street. "


Yep, If shooters can sell themselves to potential clients as well as they can sell the justification for new toys, they would all be rich and have 5 times as much crap to play with.





Jan 02, 2018 at 09:54 AM
oguruma
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p.1 #5 · p.1 #5 · New tax overhaul: Huge boon for photographers?


glort wrote:
Geez, sure would love to be a fly on the wall during that conversation....

" Yes I know I just bought a new camera last year and have only done 6 weddings with it but you see, the day after the new model come out the old one ceases to be able to do the same job it did before and I need that extra ISO the new model has along with the other 6 features I'll never use because If I am still using the old model body 3 weeks after the new one has come out, what will my
...Show more

What are you on about?



Jan 02, 2018 at 01:45 PM
leethecam
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p.1 #6 · p.1 #6 · New tax overhaul: Huge boon for photographers?


glort wrote:
Geez, sure would love to be a fly on the wall during that conversation....

" Yes I know I just bought a new camera last year and have only done 6 weddings with it but you see, the day after the new model come out the old one ceases to be able to do the same job it did before and I need that extra ISO the new model has along with the other 6 features I'll never use because If I am still using the old model body 3 weeks after the new one has come out, what will my
...Show more
I think you're mixing up justifying our purchases to our "other halves," rather than the tax man. I find the tax man is a much easier sell...



Jan 02, 2018 at 09:24 PM
iBill
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p.1 #7 · p.1 #7 · New tax overhaul: Huge boon for photographers?


Being able to deduct the entire amount of equipment purchased in that year is not new.
You have been able to do this in the past using section 179 as mentioned by kdphotography.

Being able to deduct 20% of your profit is new, and will help many small businesses.

Those living in high tax states like New York or California may pay more because of the $10,000
limit on deducting state taxes and property taxes.



Jan 03, 2018 at 01:11 AM
PhilPDX
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p.1 #8 · p.1 #8 · New tax overhaul: Huge boon for photographers?


oguruma wrote:
It would seem that we could get away with affording more gear that we wouldn't be able to otherwise.


Not really, because health insurance premiums will go through the roof very soon, and that state income taxes won't be deductible anymore doesn't help much either.

-Phil




Jan 04, 2018 at 03:54 AM
oguruma
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p.1 #9 · p.1 #9 · New tax overhaul: Huge boon for photographers?


PhilPDX wrote:
Not really, because health insurance premiums will go through the roof very soon, and that state income taxes won't be deductible anymore doesn't help much either.

-Phil



YMMV. I don't think my health insurance is likely to rise. If so, I am likely to cancel it altogethr and go without.




Jan 04, 2018 at 04:53 AM
glort
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p.1 #10 · p.1 #10 · New tax overhaul: Huge boon for photographers?


oguruma wrote:
What are you on about?


Don't worry, If you can't get it on your own, You probably wouldn't be able to comprehend it if it were explained as well.




Jan 04, 2018 at 05:13 AM
 

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glort
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p.1 #11 · p.1 #11 · New tax overhaul: Huge boon for photographers?


leethecam wrote:
I think you're mixing up justifying our purchases to our "other halves," rather than the tax man. I find the tax man is a much easier sell...


Ha Ha!

I don't have to justify anything to my Mrs other than why I'm happy with a 7D and why I see no benefit in buying the 1D. Only thing I have to do is try to explain why I don't need the top of the line camera and a heap more lenses. She keeps trying to buy me a new Go pro every time we go to an electronics store as well and I keep telling her I'm perfectly happy with the one I have got and all the accessories which won't fit a new one.

This is the woman I had to talk out of buying me ANOTHER Harley for my birthday recently. She let something slip and I said no, I don't want another one,. then there was a discussion about it! Luckily she hadn't put any money down on the thing. I told her, when I said I wanted to have a look that day we went in, I meant just have a look. Perfectly happy with what I have.

I got in trouble not 30 Min ago. The used tractor I was interested in sold before the seller I lined up to see it got back to me when they would be home. She was annoyed. She picked up the brochure I have sitting on my desk and said why don't you stop wasting time with these idiots and just go into town and buy a new one and be done with it?
Now that's tempting! :0)

I think I married a winner. She's put up being married to me for 25 Years last November and we were together 10 years before that. More suffering than any woman should have had to bear not only putting up with me, but what we have had to go through so many times in our lives together. So much more to suffer still to go and nothing we can do about it.

I'm really past material things I don't need now. I know I can never have what would make me really happy so the rest don't count but I think she's trying to compensate.

If she was a foot taller and didn't ask me to get things down from shelves and Cupboards for her 5 times a day, she'd be absolutely perfect!




Jan 04, 2018 at 05:35 AM
markd61
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p.1 #12 · p.1 #12 · New tax overhaul: Huge boon for photographers?


iBill wrote:
Being able to deduct the entire amount of equipment purchased in that year is not new.
You have been able to do this in the past using section 179 as mentioned by kdphotography.

Being able to deduct 20% of your profit is new, and will help many small businesses.


Deducting 20% of your profit will change how people record their business income. E.G. if you choose to pay yourself as a W-2 employee you may change that amount and create more bookable profit by paying yourself less.

Of course, looking at PDN's stats on the incomes of "professional" photographers it seems that more of them are using food stamps than a 1040 long form.



Jan 04, 2018 at 05:50 AM
dmacmillan
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p.1 #13 · p.1 #13 · New tax overhaul: Huge boon for photographers?


markd61 wrote:
Of course, looking at PDN's stats on the incomes of "professional" photographers it seems that more of them are using food stamps than a 1040 long form.

Too true. I suggest everyone get with their accountant. My research shows you can't focus on one area of the tax plan. I'm am anxious to hear back from our accountant. While some changes look like it will reduce the tax burden, other changes will at least offset the savings. So far my impression is they are distracting you by putting a quarter on one of your pockets so you don't notice they are taking out 30 cents from your other pocket.



Jan 04, 2018 at 02:59 PM
PhilPDX
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p.1 #14 · p.1 #14 · New tax overhaul: Huge boon for photographers?


oguruma wrote:
If so, I am likely to cancel it altogethr and go without.


So in case you have an accident (God forbid), you want to crawl into the ER on my dime? Only if I can book you for free for a family shoot.

-Phil



Jan 04, 2018 at 03:27 PM
oguruma
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p.1 #15 · p.1 #15 · New tax overhaul: Huge boon for photographers?


PhilPDX wrote:
So in case you have an accident (God forbid), you want to crawl into the ER on my dime? Only if I can book you for free for a family shoot.

-Phil


Give me a break, dude. No, it won't be "on your dime". I subscribe to this crazy, long-lost concept called "saving money for emergencies." Feel free to jump down off that high horse of yours.



Jan 04, 2018 at 06:04 PM
oguruma
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p.1 #16 · p.1 #16 · New tax overhaul: Huge boon for photographers?


glort wrote:
Don't worry, If you can't get it on your own, You probably wouldn't be able to comprehend it if it were explained as well.



ROFL.



Jan 04, 2018 at 06:05 PM
PhilPDX
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p.1 #17 · p.1 #17 · New tax overhaul: Huge boon for photographers?


oguruma wrote:
Feel free to jump down off that high horse of yours.


To use your own words from further above: what are you on about? Sarcasm detector doesn't work?


oguruma wrote:
I subscribe to this crazy, long-lost concept called "saving money for emergencies."


Good luck with that. Let us know when you've saved up enough to cover a major surgery and a month long stay in an ICU.


-Phil




Jan 04, 2018 at 06:26 PM
oguruma
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p.1 #18 · p.1 #18 · New tax overhaul: Huge boon for photographers?


PhilPDX wrote:
To use your own words from further above: what are you on about? Sarcasm detector doesn't work?


Good luck with that. Let us know when you've saved up enough to cover a major surgery and a month long stay in an ICU.

-Phil



Mmmmkay.



Jan 04, 2018 at 10:41 PM
PhilPDX
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p.1 #19 · p.1 #19 · New tax overhaul: Huge boon for photographers?


You understand that the ER is your only choice should you ever decide to go without proper health insurance, don't you? Saving for emergencies is not a viable option and major medical - even if you are able to combine it with a health savings plan - is unaffordable once you come down with the wrong illness. There's a reason why people used to go bankrupt before the introduction of the ACA.

-Phil



Jan 05, 2018 at 01:10 AM
chez
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p.1 #20 · p.1 #20 · New tax overhaul: Huge boon for photographers?


My Dad battled cancer for 5 years, 6 operations, 8 months in a cancer ward, untold visits to the oncologists.

Good luck saving your pennies to cover these types of costs.



Jan 05, 2018 at 01:30 AM
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