As accountants who have worked with thousands with photographers and on even more US tax returns, we have full empathy of the stress that many incur during tax season. Although we cannot compile our hundreds of hours of knowledge and experience into one article, this post is aimed to outline the basic knowledge photographers need to know when completing their US tax return.
As a self-employed photographer you will want the following IRS forms.
This is the basic tax form that everyone uses and applies for those with very basic tax returns. On a 1040 you’ll list your gross income, your deductions and your basic tax credits.
A schedule C is the basic form that is necessary to complete a self-employment tax return. A schedule C form includes the income you make from photography, as well as any deductions in your business. This is the basic form used for thos who are claiming income from their business.
An 8829 form is a business use of home form issued by the IRS. If you have used your home as an office or for photography work purposes, you can claim a portion of your rent or mortgage based on the size of your home office.
A 4562 form is for Depreciation and Amortization paperwork. This form is used to depreciate your equipment and other tools purchased for the year. Each piece of equipment is depreciated at a different amount of years, so you’ll want to check the classification of your equipment to see what rate it depreciates at.
Expenses that can be claimed include:
· Basic Expenses
· Travel Expenses
· Mileage Expenses
· Meal Expenses
It is not unusual to owe the IRS money if you’re self-employed. This is because those on the PAYE system have Federal and State taxes withheld from their pay cheque; those who are self-employed do not. If you owe multiple years of tax then you could be liable to a penalty. This penalty can be avoided by paying owed taxes quarterly to your state and the IRS. Filing out an estimated tax form, a 1040-ES, can set up quarterly payments.