depreciating equipment for tax purposes

<p>Hi,<br>

I am an amateur photographer. I display my work in local galleries and have sold a few photographs, for which I have to pay taxes, of course. <br>

I am filling out the necessary forms myself, and one of them is Form 4562 for deprecation of equipment. I used my new printer and camera more than 50% for business last year. <br>

My first question is concerning written evidence for >50% business use. Do my image files constitute written evidence (there are very few pictures of family, friends, etc. there; almost all are like the photographs I sell)?<br>

My second question is whether to use GDS (general) or ADS (alternative) depreciation system.<br>

I would appreciate comments by anyone with similar experience.</p>

<p>I would recommend talking to a tax accountant. But for anecdotal discussion here, you'll get more appropriate feedback if you mention which country's tax laws and enforcement agency you're dealing with. Likely you're also dealing with a local state or province's own versions of those issues as well.</p>

<p>"I am an amateur photographer."<br /><br />No, you're not. Not if you are making sales and paying taxes on them. You are now a professional. Maybe a part-time professional but a professional nonetheless.<br /><br />Either way, however, do what Matt says and hire an accountant, regardless of what country you're in.</p>

<p>I reside in the United States (New York State).</p>

<p>Excellent! New York is practically infested with CPAs. I expect you could find one who can spend an hour answering your questions for a pretty modest little fee. So cheap, compared to the consequences of doing it wrong.</p>

<p>Consulting with a tax accountant is the best advice, but wouldn't you expense your equipment at the time of purchase instead of depreciating a percentage yearly?</p>

<p>Thanks Ian. I only sell a few hundred dollars worth of photography each year. So depreciating at once is not feasible. <br>

For the same reason, consulting an accountant wipes away any gains. It should not be difficult to do it myself (I prepare my own tax forms). I just needed advice on a couple of ambiguous points. </p>

<p>Kam: "My first question is concerning written evidence for >50% business use. Do my image files constitute written evidence (there are very few pictures of family, friends, etc. there; almost all are like the photographs I sell)?"</p>

<p>Yes.</p>

<p>Kam: "My second question is whether to use GDS (general) or ADS (alternative) depreciation system."</p>

<p>GDS. Generally you would only go with ADS if required to.</p>

<p>Also, take a look at the hobby loss rules if you haven't already. <a href="http://www.irs.gov/uac/Is-Your-Hobby-a-For-Profit-Endeavor%3F">http://www.irs.gov/uac/Is-Your-Hobby-a-For-Profit-Endeavor%3F</a> </p>

<p>I'm a CPA.</p>

<p> </p>

<p>Thanks, Charles. Very useful answers and information.</p>