As a photographer, you may invest thousands of dollars creating a basic setup that includes props, backdrops, cameras, lights, etc. Thankfully, this is an investment that may give you a tax break.
Cameras, lenses, lighting, tripods, computers, and other items that you will use for more than a year should be recorded as capital expenses. Your CPA for photography may deduct a portion of the cost of your capital expense over the years you use the product. This process is called depreciation. Or you may deduct all the cost upfront at once using a Section 179 deduction that can give you a large tax break in your first year.
Besides capital expenses, you have the expense of your studio, storage, business memberships, and travel expenses. If you work out of your home, you may qualify for home office tax deductions. QuickBooks makes it easier for you or your CPA to keep track of all of this information.
QuickBooks smart organization feature allows your CPA to place expenses into categories. Your expenses are automatically sorted when it is time for your CPA to do your taxes. QuickBooks makes it easy for you to take photographs of your receipts and then automatically categorizes these expenses for you, but if you chose to do it this way, you have to set the necessary controls first.
The “Sales Tax Liability Report” will give you an up-to-the-minute report on your taxable and nontaxable sales. QuickBooks will automatically calculate your quarterly taxes, letting you know how much money you need to set aside.
Do you have questions about whether the equipment or subscriptions you purchased this year should get depreciated or if you should record them as a one-time expense? Don’t worry. Our accounting for photography professionals at Fusion CPA can answer your questions.
Invoicing Clients with QuickBooks
As a professional photographer, invoicing is your best friend. If you lose invoices, you may lose payments and that may mean a big financial hit for your business.
QuickBooks makes invoicing easy. From the dashboard, you can go to the “Invoicing” area to send your first invoice. You can select customers already entered in the database or add new customers. Next, choose the “Terms Of Your Invoicing.” Now, you can enter the photographs, editing fees, or services you have sold. Finally, you can email the invoice.
QuickBooks will automatically store the invoice information in your bookkeeping for photography once the necessary controls are set. QuickBooks lets you set up online payments and notifies you when payments have been received and when payments are overdue. You can spend your time on other things besides chasing down unpaid invoices.
Practical Advice from Experienced Financial Advisers
Whether you are prepping for a busy wedding season or planning for a commercial shoot, you deserve to know that your finances are being well cared for. This is where Fusion CPA may be able to help.
Fusion CPA offers CFO advisory for photography businesses. From bookkeeping to accounting to tax planning for photography businesses, we take charge of providing you with strategic financial guidance and insights. Our recommendations include suggestions on how to manage your cash flow, analyze financial reports, and create tax and business strategies based on your current situation and future goals.
Do you want to be knowledgeable about the present and future financial health of your business and identify areas to boost your photography business? If so, we are here to help. You can learn more about our services by clicking the button below to schedule a complimentary discovery call today!
This blog article is not intended to be the rendering of legal, accounting, tax advice, or other professional services. Articles are based on current or proposed tax rules at the time they are written, and older posts are not updated for tax rule changes. We expressly disclaim all liability in regard to actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.