Tax Guide for Photographers

Keeping up with taxes isn’t the most fun part of owning a photography business but it is one of the most necessary! Any photographer who makes over $400 is required to pay taxes: state and federal.

When I first started, I remember the end of the year being one giant headache full of numbers and math. As I grew and tried to become more organized, I would get hit with hidden fees because I didn’t know all the rules. Turns out paying taxes is pretty complicated!

That’s why I made this tax guide for photographers so you can have at least one less panic attack a year! 😉 Enjoy!

How often

When someone is employed by a company, they have their taxes automatically withheld. But as a self employed photographer, you might need to pay taxes every quarter. If you make more than $1,000 per quarter you are required to pay them quarterly. Otherwise, you just pay them once at the end of the year.

But, my advice is to just pay them quarterly from the start. Sometimes they aren’t always good at communicating to you when that changes and then you are stuck with a bunch of IRS fees. You can check the IRS website for deadlines on quarterly taxes.

My advice is to set an alarm on your phone for the one week before the taxes are due so that you are safe!

How much to pay

You can use the IRS Form 1040-ES to determine how much you should pay each quarter. This form is kind of like a worksheet. It will lead you step-by-step to break your expected income for the year down into your four quarterly tax payments.

Another part of the 1040-ES form is figuring out your self employment tax. It’s just like other taxes in that it is always a percentage of your income. Self-employment tax includes Social Security tax at 12.4% and Medicare tax at 2.9%. The reason it’s called self-employment tax is because when working for a company an employer will usually pay half of those taxes for their employees. But obviously, as a photographer, you’ll have to pay the entire 15.3%.

For your state taxes you will have to visit your state site to find a form like the one above. Every state has different tax rates so you’ll want to make sure you snag the right form.

Each of these forms will also tell you how and when you can pay your quarterly taxes. You can pay by phone, online, in person, or by mail. If you pay by mail, you’ll include a payment voucher from the form. You should plan to set aside 30% of your taxable income (not gross income). Taxable income is your gross income minus the cost of deductions.

Deductions

The 1040-ES form will show you how to deduct business expenses, too. But make sure you do the hard work first. As a photographer, you’ll want to find every way to reduce the taxes you have to pay. Remember though; deductions don’t mean that you don’t have to pay for those expenses but it reduces the amount of income you are taxed on.

For example, if you make $75,000 in one year but you have $15,000 in write-offs, you’ll only be taxed on $50,000. Here’s a list of things you can deduct:

• Equipment- cameras, tripods, stands, lighting, laptops, etc.
• Studio and storage space- if you rent it out, it’s fully-deductible. But if you use your home as an office, studio, or storage space you have to calculate square footage. The IRS allows you to deduct $5 per square foot up to 300 square feet.
• Travel expenses going to and from sessions
• Business insurance
• A portion of your auto insurance
• Website and Domain fees
• Transaction fees
• Licenses
• A portion of your cell phone bill
• A portion of your rent/mortgage, utilities and insurance costs for your home- again using the same square footage method as above
• Office Supplies
• Education and Training- online courses and conferences can be included!
• Meals- only meals that are necessary for business (examples: client consultation or meals while traveling at conference or destination wedding). The IRS allows you to deduct 50% of your eligible meal expenses.
• Gifts for your clients. Just remember the gift amount cannot exceed $25 per client.
• Hired help- things like second shooters, models, contracted labor and hired editors can be deducted. Just make sure you give them a 1099-NEC form at the end of the year.
• Legal Expenses- whether that’s purchasing contracts online or hiring a lawyer to write up your own.
• Marketing and Advertising
• Software- Photoshop, Lightroom, Honeybook, Blogstomp, Tailwind, etc.

Straight Line Depreciation

This is a really good method for photographers to use when deducting for their equipment. For example, let’s say you have a $2,000 camera. First you’ll estimate the “salvage value” and decide how many years you will plan to use it. For the sake of this example, let’s pretend you use it for 5 years and you get $500 for it.

You’ll subtract the “salvage value” from it’s original cost. In this example it’s $1,500. Then, divide that by the number of years you plan to use the equipment. Which leaves you with $300 per year to deduct for 5 years. You will do this with all of your gear.

Bookkeeping

When it comes to keeping track of all this, I use Honeybook. Yes, Honeybook is a client management software but it also links up with your bank account so it will keep track of your expenses and profit throughout the year. At the end of the year, you export it as a .csv document and hand it over to your accountant.

My favorite way to keep track of business miles is using an app called, “MileIQ.” It sync’s with the GPS on your phones device and knows when you drive places. At the end of the day (or whenever you get around to it) you can swipe right or left which will identify the drive as business or personal. It even lets you customize the model and make of your car.

Final Tips

Hope you enjoyed this tax guide for photographers! Make sure you keep up with timely tax payments and keep all of your receipts! If it’s overwhelming to you, hire an accountant. And probably the most important tip of all is to separate your business and personal accounts. This makes tax time SO. MUCH. EASIER.