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Author Topic: US Taxes and deductions ?????  (Read 3533 times)

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« on: February 16, 2010, 19:39 »
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I have another Day job where I make a good income and pay lots of taxes.

Last year I went from a hobby of P&S cameras to DSLR's for the primary purpose of having fun and selling my stuff on microstock sites.  I only got about $200 microstock income (but it's growing!!!), but I spent $$$ on a DSLR, Lens, Filters, Tripods, Flash etc. 

I bet about 95% of my images are microstock related.

So I fill out my taxes for this year, using turbotax.  I report the $200 income on top of my normal income and the software guides me to the Form C.  This is where I put income, expenses, costs of goods sold.  I start filling that out and I notice that my total return back to me increases by a few thousand dollars.

I have generally found that good information like this means that I am doing something wrong.  Can I deduct my camera stuff in 2009?

You guys are probably not tax experts but I am sure that all most of you started out like this.

Any thoughts


« Reply #1 on: February 16, 2010, 19:49 »
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I believe so, since you have other income, but a hobby/biz can only lose money relative to expenses 3 out of five years or something like that.

xst

« Reply #2 on: February 16, 2010, 20:21 »
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I believe so, since you have other income, but a hobby/biz can only lose money relative to expenses 3 out of five years or something like that.

If you are hobbyist, you cannot deduct more then you earn on this hobby. So you your deductions for lenses, camera, etc would be limited by $200 you earned.
to qualify for business you have to be profitable 2 years of each consecutive 5, unless you want to go through IRS audit and argue with them.
If you don't know, I'll tell you - you don't want to go through IRS audit

dbvirago

« Reply #3 on: February 16, 2010, 21:32 »
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You really need to get your tax advice from an accountant rather than here.

having said that.... There's no hard and fast rule on x years of y profitable. If you want the info from the horse's mouth, loook here.
http://www.irs.gov/businesses/small/article/0,,id=99239,00.html

If you expect your income to go up, and I hope you do, you could capitalize the major stuff like the camera and spread that deduction over several years.

But don't think you did something wrong if a loss reduces your tax exposure. Unlike some other deductions this is straight off the top with no cap or AMT.

RacePhoto

« Reply #4 on: February 17, 2010, 01:02 »
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You really need to get your tax advice from an accountant rather than here.


See Above!

Opinion follows: After that, I'll add that because I own a small business, I have someone else do my taxes and have since 1970. When I look as see what they have done (which I don't always bother to do) I see that equipment has been depreciated over a five year period. Income is income, and equipment used to earn that income isn't deducted, it's depreciated.  ;D

I have figured my own taxes on TurboTax and compared it to what the accountant came up with and every time, I paid less. Could be I don't know how to use the software, but when I pay someone $250 a year to fill out some tax forms for the Feds and the state, I figure it's worth it, because they save me that much every year. These are Tax Accountants who go to school and know all the changes and latest laws.

See above. You need to ask a tax accountant, not people on an internet forum. Even if that forum happens to be labeled as a tax advise forum or is run by the IRS.

Last time I needed an answer, I phoned the IRS and got one answer, "send in the form, wait 60-90 days and there was no refund if they didn't find what I needed."

A month later I was still checking so I called again. Got a slightly different answer. "Yes, it could be 2-3 months but there would be a refund if they couldn't locate anything."

Asked my accountant and got a slightly different version, and a copy of the short form. After reading it and discovering a detail I had failed to mention to the accountant (time being over four years ago)

I called the IRS a third time. That person basically laughed and said, "you aren't going to get that information with either form, it's over 10 years ago." Don't even bother sending the form in.

I contacted an IRS advocacy agent and in three days, they had found and faxed me the information!

Point of this is I asked the IRS three times and got three different answers. What chance is there that someone on this forum is going to nail the answer for you?  :D
« Last Edit: February 17, 2010, 01:05 by RacePhoto »


 

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