Deduct equipment before business registration

[RubenZamora]

Hey quick question.


I bought some Camera equipment recently and sometime next week I'm going to register my business. Can I still deduct my equipment cost even if I bought it before the business was actually registered. Is the IRS going to check?

[CobyPhoto]

Sure you can. Your camera equipment is an investment in the company. If you are not familiar with accounting and GAAP, you should really consult a CPA or tax person to do your taxes for the business.

As a sole proprietor, you report your business income/loss on your personal 1040.

Just keep receipts and good records for the CPA or tax preparer and you should be fine with writing the equipment off as an expense of depreciating it out as an expense, whichever your CPA/Tax Guy says is best for you.

CJ

[LoungeLizard]

...and you can only writeoff what you use for business purposes. If you use any of the equipment for personal use, you'll have to keep records to show what portion is allocated to personal v. business.

Of course, I'm not a CPA - but I did read that somewhere while staying at a Holiday Inn Express.

[CobyPhoto]

Pretty good Jesus...

This goes for ANY equipment you claim for your photography work...(i.e. your computer, laptop, etc.)

If it is NOT used for your photography business only, then you cannot write the entire amount off! This is exactly why I say consult a CPA. Cause if you ever are audited, they will hit you with this...if you don't have "seperate" equipment, they try to get you on this.

Best way is to consult someone that knows all the current issues and can do your income/loss and taxes for you.

CJ

[RubenZamora]

How would they actually know what is used for what. I mean lets get realistic here. Even if I took a pic of a family event for personal use I could say some family members were interested in purchasing the pics etc. :)

[LoungeLizard]

You can say whatever you want - you'll just have to prove it when challenged by the IRS!

As for me, I write off my cameras and have a P&S for personal stuff. I don't write off my computers/printers as I use them for other stuff (like coming on TPF!). I write off the external HDDs as I only use them to archive photos I shot for pay.

It's up to you to decide if you're going to be 100% legit or determine the level of risk you're willing to take.

I always remember that Al Capone was never convicted of any of his alledged criminal activity - he was convicted of tax evation!

[CobyPhoto]

Not trying to be funny here, but you obviously have never been through an IRS audit. You DO NOT want to piss those guys off. They can get your LIFE history with a phone call. Bank records, 1099's etc. ANYTHING to do with money and your business.

And I can't impress upon you enough, with the IRS, you are GUILTY until proven innocent. You can claim ANYTHING you want, but you must prove it to their satisfaction.

The best way is to be legal from the very beginning and not take risk.

CJ

[pbyd]

Coby, you are so right again. Having gone through both State Comptrollers audit and with the IRS they win, you lose. If anyone really thinks that they can lie, they should hope they never get an audit letter. But then in the world of "PRO" Photographers most seem to stray from the truth on there websites so why not in the rest of there lives.

[Big Dog]

Originally Posted by LoungeLizard

Al Capone was never convicted of any of his alledged criminal activity - he was convicted of tax evation!

Um, the tax evasion was criminal ...

... but we know what you meant.