Author Topic: Do you file taxes on your income from stock photography? (Honest) (Read 12835 times)

K46 · « **on:** May 22, 2018, 11:58 »

This is intended to seek out honest opinions on whether most of you pay taxes on your stock photography incomes or not. I'm scheduled to move countries in 2 years, and my current country of residence has a lot of hurdles to sell stock the official way. Accordingly I'm going to put off selling my images until later.

So I'd like to see what the majority are doing regarding this.

increasingdifficulty · « **Reply #1 on:** May 22, 2018, 12:06 »

Yes, of course, it's my full-time job.

It's quite hard to live in a society with an official income of $0, and no filed taxes.

Buying houses, apartments, being able to trade high-risk assets etc., becomes quite difficult.

...oh, and I almost forgot, you go to jail if you don't.

Sure, if you make $100 per year no one's going to care, but might as well get used to the thought.

mj007 · « **Reply #2 on:** May 22, 2018, 12:30 »

Yes I pay taxes on my stock photo income. Most if not all the sites send me a 1099 tax form in February. I don't like paying it but I also deduct expense items like props, camera equipment, computer equipment, mileage , and anything else I can think of that is legit...... W. Scott McGill

increasingdifficulty · « **Reply #3 on:** May 22, 2018, 12:36 »

It's worth thinking about what could happen if you start earning a significant income in the future.

In 3 years you might feel like you're earning so much you really ought to start paying taxes, and they might ask you how long you've been in business for. They can also ask you to show evidence of that. If they see that you've had portfolios active for years you might end up with a nice penalty.

pkphotos · « **Reply #4 on:** May 22, 2018, 12:49 »

Yes f course I pay tax on my stock income. I don't want to pay thousands in penalties and/or go to prison

pancaketom · « **Reply #5 on:** May 22, 2018, 13:14 »

yes, I pay taxes on my income. I also deduct a fair bit of the expenses.

jefftakespics2 · « **Reply #6 on:** May 22, 2018, 14:13 »

Yes, of course -- just like I do with all of my photography income. Expenses and amortization are deducted of course. My accountant looks after it. The last thing in the world you need is having your country's revenue department coming after you. It never ends well!

K46 · « **Reply #7 on:** May 22, 2018, 14:28 »

Thank you all very much. Being a student, I've yet to pay taxes for the first time. I have a large portfolio of pictures that were ready for stock but I think I will wait until I settle down to avoid double taxation.

Most importantly, I hope everyone understands that this question was never meant in an offensive way, as made clear by my age, it's an honest one, I thank you for your replies!

Zero Talent · « **Reply #8 on:** May 22, 2018, 16:38 »

Quote from: increasingdifficulty on May 22, 2018, 12:06

Yes, of course, it's my full-time job.

Yes, of course, it's my part time job.

Noedelhap · « **Reply #9 on:** May 22, 2018, 18:05 »

Of course, even though I don't like having to pay taxes. But it's better than the possibility of a fine or jail time (although the latter probably won't happen with the small amount I'm making on stock).

ShadySue · « **Reply #10 on:** May 22, 2018, 18:37 »

I do, for all the reasons mentioned above, it's the right thing to do, I don't want a legal case, it means I can deduct expenses.
The last might be worth rethinking - at the beginning of your stock journey, you're likely to have more expenses than profits, so filing a tax form claiming a loss might be to your advantage. Consult an accountant for ease and legality.

cobalt · « **Reply #11 on:** May 22, 2018, 18:38 »

Of course, it is sometimes my part time, sometimes my highest income.

I do work with an accountant, I find it much to confusing to understand German tax law and what can be deducted by myself etc...but yes, of course, stock income is a business income.

Maui · « **Reply #12 on:** May 23, 2018, 03:03 »

Also, more and more countries exchange data. You never know if your income from a stock agency isn't one day reported back to your tax authority.

jjneff · « **Reply #13 on:** May 23, 2018, 05:20 »

Yes I claim every red cent, I let my accountant figure out what I owe.

ravens · « **Reply #14 on:** May 23, 2018, 05:27 »

Here's one more yes.

Yes, I pay taxes for my stock income - and deduct my expenses. You can't deduct anything if you don't pay!

JetCityImage · « **Reply #15 on:** May 23, 2018, 10:02 »

In addition to everything everyone has already said, try to put money in a IRA, which also off-sets taxes...

ShadySue · « **Reply #16 on:** May 23, 2018, 10:06 »

Quote from: JetCityImage on May 23, 2018, 10:02

In addition to everything everyone has already said, try to put money in a IRA, which also off-sets taxes...

I just googled IRA and the first page was 100% Irish Republican Army.

increasingdifficulty · « **Reply #17 on:** May 23, 2018, 10:12 »

Quote from: JetCityImage on May 23, 2018, 10:02

In addition to everything everyone has already said, try to put money in a IRA, which also off-sets taxes...

You assume he/she is American...

cathyslife · « **Reply #18 on:** May 23, 2018, 10:36 »

IRA = individual retirement account
That should clear it up for those not in the US.

PZF · « **Reply #19 on:** May 24, 2018, 03:24 »

Yep. I own up. Even though I can't put any expenses against it!

sharpshot · « **Reply #20 on:** May 24, 2018, 04:21 »

Quote from: ShadySue on May 23, 2018, 10:06

Quote from: JetCityImage on May 23, 2018, 10:02
In addition to everything everyone has already said, try to put money in a IRA, which also off-sets taxes...

I just googled IRA and the first page was 100% Irish Republican Army.

It confused me at first, the IRA isn't something most of us would want to give money to in the UK. Another example of two nations divided by a common language

thiagosantiro · « **Reply #21 on:** February 05, 2020, 16:39 »

Quote from: mj007 on May 22, 2018, 12:30

Yes I pay taxes on my stock photo income. Most if not all the sites send me a 1099 tax form in February. I don't like paying it but I also deduct expense items like props, camera equipment, computer equipment, mileage , and anything else I can think of that is legit...... W. Scott McGill

I can not yet start a thread on this tax subject due to being a newbie but want to know if all microstock agencies require identification upon signup and registration so that they can send you a 1099 tax form? Are there any microstock agencies that do not require ID upon signup and registration and only deposit sales into a account such as paypal?

georgep7 · « **Reply #22 on:** February 06, 2020, 03:25 »

Quote from: K46 on May 22, 2018, 14:28

Thank you all very much. Being a student, I've yet to pay taxes for the first time. I have a large portfolio of pictures that were ready for stock but I think I will wait until I settle down to avoid double taxation.

Most importantly, I hope everyone understands that this question was never meant in an offensive way, as made clear by my age, it's an honest one, I thank you for your replies!

There is a thershold that you have to reach to pay taxes (and a long jourhey to upload, tag and sell I guess...)
As a reference in my country is over 500 Euros. Below that you are covered not to report.
But of course everything e.g. Paypal to local bank transfers are monitored by tax office.

Nico · « **Reply #23 on:** February 06, 2020, 09:36 »

Yes I pay taxes for my stock income for many reasons:

- It allows me to send the income to my main bank account, and eventually buy car, real estate...
- I get health insurance and retirement plan
- I don't want to end up in jail or with big fines
- Entities (banks, states, ...) exchange more and more data, and tax offices can look up many years backward to find some hidden income (5 to 10 years backward in my country), so you are never safe if you hide income
- I help develop my country (better schools, better heath system, safer roads, ...)

marthamarks · « **Reply #24 on:** February 06, 2020, 09:58 »

Just do the right thing. You'll sleep way better.

Opalescence · « **Reply #25 on:** February 06, 2020, 10:02 »

Clean records have value.

pancaketom · « **Reply #26 on:** February 06, 2020, 21:51 »

Yes, and deduct some things too. Give it a few more years and I might not have much to report though.

ouatedeP · « **Reply #27 on:** February 07, 2020, 09:37 »

Quote from: georgep7 on February 06, 2020, 03:25

Quote from: K46 on May 22, 2018, 14:28
Thank you all very much. Being a student, I've yet to pay taxes for the first time. I have a large portfolio of pictures that were ready for stock but I think I will wait until I settle down to avoid double taxation.

Most importantly, I hope everyone understands that this question was never meant in an offensive way, as made clear by my age, it's an honest one, I thank you for your replies!

There is a thershold that you have to reach to pay taxes (and a long jourhey to upload, tag and sell I guess...)
As a reference in my country is over 500 Euros. Below that you are covered not to report.
But of course everything e.g. Paypal to local bank transfers are monitored by tax office.

interesting. so if you found a way to have many sources of revenue that only made 499 euros each, you wouldn't have to pay any tax?

Canada i have to declare all revenue from all sources, and tax determined that way

georgep7 · « **Reply #28 on:** February 08, 2020, 05:14 »

Quote from: ouatedeP on February 07, 2020, 09:37

Quote from: georgep7 on February 06, 2020, 03:25
Quote from: K46 on May 22, 2018, 14:28
Thank you all very much. Being a student, I've yet to pay taxes for the first time. I have a large portfolio of pictures that were ready for stock but I think I will wait until I settle down to avoid double taxation.

Most importantly, I hope everyone understands that this question was never meant in an offensive way, as made clear by my age, it's an honest one, I thank you for your replies!

There is a thershold that you have to reach to pay taxes (and a long jourhey to upload, tag and sell I guess...)
As a reference in my country is over 500 Euros. Below that you are covered not to report.
But of course everything e.g. Paypal to local bank transfers are monitored by tax office.

interesting. so if you found a way to have many sources of revenue that only made 499 euros each, you wouldn't have to pay any tax?

Canada i have to declare all revenue from all sources, and tax determined that way

My accountant said that i had to declare myself as freelancer by the first euro. When he realised that overall annual profits were below 500 euros he said that it was ok to file only payed work as an emploee i had done for the year.
For me it was critical as long as if a minimum $50 payout requires to be a freelancer, that means 250euros per month for insurance plus 500 euros tax advance (yup, next year pre-taxxing) plus around 45% taxes plus many other irrelevant expences e.g. for the chamber of commerce (75 per year IIRC from 2015).

Long story short, under 500 euros the tax officer don't mind except of course there are other reasons or indications for tax-avoidance or grey-income.

stockmarketer · « **Reply #29 on:** February 08, 2020, 08:57 »

A few months ago I got sent a bill for $30,000 from the IRS for underreporting income in 2017. It's the whole paypal 1099 K problem where paypal and the agencies double report our income. What I learned is that in they eyes of the IRS, if paypal is going to report the income, then the agencies should NOT. But with no coordination between the agencies and paypal, the job is ours to explain what happened. The IRS initially told me to get a letter from every agency explaining they didnt pay me directly, which of course is impossible. Instead I had to write my own detailed letter of explanation with a TON of backing info. In the end, they cancelled the bill, and I'm left trying to figure out how to explain the situation in my 2019 return. Will probably report all the agency AND paypal 1099s with an entry subtracting out the agency 1099 total, along with a note explaining it is double reporting of the same income. Still not positive it is the right approach. Anyone else deal with this in a different way?

ouatedeP · « **Reply #30 on:** February 08, 2020, 09:33 »

Quote from: georgep7 on February 08, 2020, 05:14

Quote from: ouatedeP on February 07, 2020, 09:37
Quote from: georgep7 on February 06, 2020, 03:25
Quote from: K46 on May 22, 2018, 14:28
Thank you all very much. Being a student, I've yet to pay taxes for the first time. I have a large portfolio of pictures that were ready for stock but I think I will wait until I settle down to avoid double taxation.

Most importantly, I hope everyone understands that this question was never meant in an offensive way, as made clear by my age, it's an honest one, I thank you for your replies!

There is a thershold that you have to reach to pay taxes (and a long jourhey to upload, tag and sell I guess...)
As a reference in my country is over 500 Euros. Below that you are covered not to report.
But of course everything e.g. Paypal to local bank transfers are monitored by tax office.

interesting. so if you found a way to have many sources of revenue that only made 499 euros each, you wouldn't have to pay any tax?

Canada i have to declare all revenue from all sources, and tax determined that way

My accountant said that i had to declare myself as freelancer by the first euro. When he realised that overall annual profits were below 500 euros he said that it was ok to file only payed work as an emploee i had done for the year.
For me it was critical as long as if a minimum $50 payout requires to be a freelancer, that means 250euros per month for insurance plus 500 euros tax advance (yup, next year pre-taxxing) plus around 45% taxes plus many other irrelevant expences e.g. for the chamber of commerce (75 per year IIRC from 2015).

Long story short, under 500 euros the tax officer don't mind except of course there are other reasons or indications for tax-avoidance or grey-income.

interesting. when i started For me it was the opposite, being able to declare a free lancer allowed me to have a small business loss from my gear and use it against my other income.

which actually shows that it is totally different for every one, based on circumstances and tax environment.

qunamax · « **Reply #31 on:** February 08, 2020, 10:55 »

Absolutely not, I'm not into funding corrupt and incompetent government's new Audis. It's not even regulated or enforced by law.
Strongly depends where you live.

trek · « **Reply #32 on:** February 08, 2020, 12:04 »

Quote from: stockmarketer on February 08, 2020, 08:57

A few months ago I got sent a bill for $30,000 from the IRS for underreporting income in 2017. It's the whole paypal 1099 K problem where paypal and the agencies double report our income. What I learned is that in they eyes of the IRS, if paypal is going to report the income, then the agencies should NOT. But with no coordination between the agencies and paypal, the job is ours to explain what happened. The IRS initially told me to get a letter from every agency explaining they didnt pay me directly, which of course is impossible. Instead I had to write my own detailed letter of explanation with a TON of backing info. In the end, they cancelled the bill, and I'm left trying to figure out how to explain the situation in my 2019 return. Will probably report all the agency AND paypal 1099s with an entry subtracting out the agency 1099 total, along with a note explaining it is double reporting of the same income. Still not positive it is the right approach. Anyone else deal with this in a different way?

My understanding is that paypal issues a 1099K for people who have 200 transactions "and" $20,000 in earnings. Keeping the transaction number below 200 should fix the problem.

stockmarketer · « **Reply #33 on:** February 08, 2020, 13:03 »

Yeah, I tried to limit my payment requests and withdrawals in the last few months of the year. Hoping I stayed under the threshold this time.

marthamarks · « **Reply #34 on:** February 08, 2020, 17:59 »

Quote from: trek on February 08, 2020, 12:04

My understanding is that paypal issues a 1099K for people who have 200 transactions "and" $20,000 in earnings. Keeping the transaction number below 200 should fix the problem.

Whew, what a relief! No worries for me in that regard.

cathyslife · « **Reply #35 on:** February 08, 2020, 18:51 »

Quote from: marthamarks on February 08, 2020, 17:59

Quote from: trek on February 08, 2020, 12:04
My understanding is that paypal issues a 1099K for people who have 200 transactions "and" $20,000 in earnings. Keeping the transaction number below 200 should fix the problem.

Whew, what a relief! No worries for me in that regard.

Ditto.

Roger Mitsom · « **Reply #36 on:** June 10, 2020, 20:21 »

Quote from: K46 on May 22, 2018, 14:28

Thank you all very much. Being a student, I've yet to pay taxes for the first time. I have a large portfolio of pictures that were ready for stock but I think I will wait until I settle down to avoid double taxation.

Most importantly, I hope everyone understands that this question was never meant in an offensive way, as made clear by my age, it's an honest one, I thank you for your replies!

Having been freelance for 20 years in the photo industry (though new to stock) let me tell you that you are better served using the system to your advantage by utilizing deductions than by trying to hide income. I didn't pay taxes on income for a few years when I started out and just know it will come back to you with interest. And the government doesn't forget.

Your income with these companies is logged. That's why they have your info.

Also, likely you aren't making a whole lot from stock right now. Working your deductions on gear the right way right now is an advantage. You can deduct a $3500 camera purchase from your overall liability even if you only made $300 that year.

Also, if you are freelance/ independent contractor, finding an accountant who understands the business will save you more money than it costs.

Mrblues101 · « **Reply #37 on:** June 10, 2020, 21:45 »

As non-US resident i totally dont understand how taxes thing works for MS...

I just fill the Tax form that agencies gives to me and they automatically discount the taxes from sale in the USA...

I didn't report my earnings to my local tax center becuse they don't care about internet commercial activity...

Anyway... i always was curious about how it works...

Whiskybottle · « **Reply #38 on:** June 11, 2020, 04:53 »

Would be useful if you guys say which country you're from, as the rules vary.

For me (UK) my accountant did my tax for me, but refused to accept my (significant) expenses. Seems it was too much like hard work, so I ended up with a bill and a right mess to sort out. Following year I did it myself and got a tax refund back into my back within a couple of weeks.

CommuniCat · « **Reply #39 on:** June 11, 2020, 13:32 »

Yes of course. Always declare income. Just remember that every camera, every trip you take with your models, every hotel you stay in while travelling with your models, every prop you buy for stock, including food if you shoot food as stock is then a legitimate expense. Also, times are tough and sometimes we don't make a profit with our work. Sometimes it's more expensive to go to all of these locations with our models than we make. Especially when we get paid $0.10 for a download. Such is life.

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Author Topic: Do you file taxes on your income from stock photography? (Honest) (Read 12835 times)

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