Is Camera equipment a 5-year property for depreciation (taxes?)

Discussion in 'Business of Photography' started by mormegil, Mar 21, 2006.

  1. Hi everyone,

    Now that I'm getting some substantial sales, I plan to file as a
    business under US tax law next year.

    I'm trying to estimate my expenses and see if I need to pay
    quarterly/estimated taxes. I'm trying to figure out depreciation
    for camera equipment, digital SLR and lenses.

    Would this be the same as computer equipment, which is considered a
    5-year property (20% depreciation per year from the cost basis, I

  2. Get thee to a good CPA.
  3. Another way to put it. Would TurboTax Premiere be good enough? Or would an accountant be necessary? This is just sideline stuff for me, not my "profession" ($3000 a year income max).
  4. If it's a film camera I would say 5 years would be about right. If it's a digital I suppose you could try to deduct it as an operating expense, arguing it only has a useful life of a years or two before obsolescence sets in.
  5. There's a fairly high "179" deduction that would usually allow you to deduct it all in one year instead of depreciating.
  6. Unfortunately I'm a renter with no dependents, so I have no tax shelter. That means I'm taking standard deductions. So that means I can't deduct any business losses. So I can only deduct business expenses as far as business income (sched C).

    I'm looking to get a 5D, so that cost in a 179 would put me over my income. So it's actually better for me to use depreciation and spread it out over a few years. That'll also keep my tax owed more consistent.
  7. I can see where you're coming from, BUT, also you should know that the IRS doesn't red flag you ordinarily for one or two years of loss. They expect you to show one or two years of profit generally over the first five years of a business. I think you should see a accountant/tax adviser. They help take the fear out of the whole process and will take what you are intitled to without your own fear and guilt getting in the way. Just slowly learn to play the game- but you need someone who knows more than you think you know.

    Good luck.
  8. Don't remember if this was 5 or 7 years. If you buy the version of Turbo Tax that can do Sch C, when you enter an asset for depreciation, it will give you a choice of categories with the correct depreciation rate, in a pull-down menu, and one of them will be photographic equipment. Terra Galleria Photography
  9. Incidently, you CAN deduct loss. It has nothing to do with standard deductions. Two different areas. And being a renter has NOTHING to do with it.
  10. Being a renter means I don't have a tax shelter, because I don't have a mortgage. If I itemized my deductions, I'd have something like $1000 (if I'm lucky) of deductions. I'd rather take the standard deduction.

    And I'm pretty sure I can't deduct business loss if I don't itemize my deductions (taking standard deductions). I could be wrong.

    Glad to know that TurboTax has the drop down menu. That'll make things a lot easier.

    Thanks for the help everyone.
  11. "I'm trying to estimate my expenses and see if I need to pay quarterly/estimated taxes."


    The IRS will determine if you are allowed to "donate" self-employment and quarterly withholding payments after the first year you file a "business" return. Once you are on their list, you can deduct all you feel comfortable with___as long as you make your estimated quarterly payments. I don't think the IRS will find a lot of humor in getting a quarterly payment voucher with a itemized list of what you want to take as depreciation for the quarter.

    As noted above, you need to find a good accountant if you need 'legal' assistance.
  12. Sounds good everyone. Thanks for the advice and info. I guess I'll be calling up a CPA, but I'm glad I did a bit of "pre-research" here.
  13. You deduct losses on your sched. C. Your standard deduction is entered on your 1040- two seperate entities.
  14. You may want to check out this recent thread. The IRS link may also answer your question.
  15. Ah, I see what your saying. So I can deduct my business losses from the rest of my income total income. So if I run negative on my sched C, I can subtract that amount from my other income.
  16. No...You can deduct loss only from your Sched. C income. You can't really deduct Sched. C income from another saleried job to offset that. You CAN deduct up to all your loss from the Sched. C stuff, and under some circumstances I think you can carry forward losses from previous years- but this is more technical and you'd need a CPA or Tax Adviser for that stuff.
  17. According to my CPA, you can take camera deductions either over 5 years or, if you wish, you can take them all in one year. Obviously there are consequences of both methods and that's something you need to discuss with your CPA. If you don't have a CPA, you probably need to get one.

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