As a Photographer you are always on the go and spending money left and right to make things happen. Whether you are helping an individual, a couple with Wedding photography or helping a multi-million dollar company do headshots for its managers, you are always spending money. Have you ever thought which for these expenses are a tax write off? In this article we will be discussing “18 Tax Deductions for Photographers in 2021-2022”.
These Tax Strategies for Photographers can dramatic effect your tax Bill. Read on to learn these 18 Tax Deductions for Photographers and also see our bonus tip at the end.
What Are Best Tax Deductions for Photographers?
Do you know what are Best Tax Deductions for Photographers. Lets review 18 top tax deductions that Photographers can use in 2021 and 2022.
1. Advertising & Marketing for Photographers
As most of the Photographers get their business from online these days, you can deduct your expenses such as Website, Business Cards, Website Hosting cost, domain cost and so on. You probably also spend money on Yelp, Google AdWords, Facebook and other online advertising platforms. All these expenses are tax deductions for federal and state tax purposes.
If you still do mailing campaigns such as postcards and ads in magazines, you can deduct those expenses as well.
2. Education And Training for Photographers
One of the things we have learned by talking to hundreds of successful Photographers that they always invest money in their earning ability. Many work with other successful Photographers to learn and upgrade their skills. Many photographers also spend money on continuing education requirements to stay on top of legal and business requirements.
Many successful Photographers also buy Audio book subscription from Amazon or real estate books, and online courses. These expenses not only reduce your taxable income but also can help you increase your earned income as well.
3. Required Licenses And Dues For Photographers
In order to work as a Photographers you are required to maintain your license and in pay for dues either on year or quarterly basis. This may include but are not limited to City License, County License and State Licenses. All these expenses can be legal tax write off.
4. Phone, Internet & Fax
Photographers spend a large amount of the time over Phone, Internet either answering prospective customers phone or doing marketing. As a Photographer you can write off Large portion of your Cellphone (Verizon or AT&T), Internet, and Fax/E Fax Charges.
5. Insurance for Photographers
Photographers are required to carry various insurance to protect the public. These insurance include General Business Coverage Insurance and Business Vehicle Insurance.
If you are successful enough to have your own office, you may have employees and will need to pay Workers Compensation. This is also tax deductible.
6. Photographers Vehicle(Truck or Van) Tax Deduction
Photographers spend more than 60% of their time using their business vehicles, either traveling from job site to site either performing work or providing quotes to customers. You also spend time going to part stores buying parts to use at the job sites.
Vehicle expense are important deduction and its crucial that you learn all the options before making your choice.
You have two options when claiming Painting Business Owner Vehicle Tax Deduction:
Simple Method (Standard Mileage Deduction)
The simple method where you take a cost per mile for miles you driven for business.
For 2021, the standard mileage rate is 56 Cents per mile.
For Example: if you drove 10,000 miles, you could deduct $5,600 from your
In addition to Standard Mileage expense, you can also get to deduct DMV Registration fees and taxes, car loan interest, Vehicle Cleaning, Bridge Tolls, and parking fees to the standard mileage deduction.
Actual method is typically used by many Photographers especially when their actual expenses are significantly more than the standard mileage method.
In actual method, you itemize the list of expenses pertaining to your vehicle. Vehicle Repairs and maintenance, Parking, Vehicle Lease Expense, Vehicle Cleaning, DMV fees and Depreciation.
Tip: We recommend looking into Tax Deductions for Photographers regarding Pickup or Large Vehicle Purchase. This is especially helpful if you purchase a business vehicle that is equal or greater than 6000 Pounds. In this case you may be able to depreciate the vehicle 100%(Given its purely used for work and not for personal use)
7. Business Travel & Meals
If you work across state or across country you may have to travel a lot. Many of the Travel Expenses are fully tax deductible. These expenses may include Airfare, Hotel Stay & Lodging and Travel Meals.
On the other hand if you are not travelling and taking a client out for a business meal and taking another photographer, or vendor out to discuss business you can write off Meals. Usually meals are 50% deductible but in 2021 and 2022 laws may be slightly different and may allow up to 100% deduction of meals.
9. Home Office Deduction for Photographers
Many Photography business owners work from their home. They usually have their computer, printer and other equipment setup at home.
IRS requires that portion of the home deducted on your tax return is exclusive area and is not share for personal purposes.
For example you cannot have a small table on side of bedroom. There are two methods for deducting your home office. Simple & Complex Method.
Simplified Method for Photographers
Simple method allows you to take your square footage and multiply by 5 dollars a square foot. Max amount you can write of under this methods is $1500.
An example would be a 100 square foot room that you use exclusively as your office. Multiplying that by $5 gives you $500 that you can deduct for your home office.
Detailed Method for Photographers
In order to calculate home office deduction under this method
first you find out what is total size of your home office, example 200 Square foot then you divide that by total home size, example 2000 Sq Feet. So Office is 10% of the total home.
Secondly, you take home expenses such as Mortgage interest, Insurance, Property Tax, Repairs and Utilities and come up with the total example $20,000
Thirdly, you take 10% of $20,000 which will be $2000
10. Photographers Rent And Utilities
If you rent a space for your photography business, then the rent you pay is tax-deductible along with Office utilities such as electricity, water & trash service.
This is an important Tax Deductions for Photographers for 2021-2022 as many photographers need to store their equipment either at their shop or at rented storage or warehouse space.
11. Business Gifts ($25 Deduction Limit)
IRS allows Business Gifts of $25 Per person Per year. If you pay anyone more than that then it may be taxable depending up the purpose and what was the Gift intended to accomplish.
If a payment can be considered other income or referral and you pay someone $600 or more then you are required to issue them a 1099M or 1099 NEC.
12. Self-Employed Health Insurance Deduction for Photographers
If you are self employed, most likely you have to buy your own health insurance. You can deduct health insurance you pay for yourself or your family. This is written off as a Adjustment in your income taxes.
13. Photographers Tools and Equipment
Photographers business owners often purchase standard business equipment like computers, camera, stands, backdrops, iPad for invoicing.
Most of these items are fully deductible(expensed) in the year you purchase them versus having to depreciate them over multiple years.
However, if you find yourself buying expensive items such as Laptops, high resolution Cameras that cost over $2500, be sure to check with your Tax Accountant & CPA if it can be deducted or depreciated over time.
You may be able to take Section 179 or Bonus Depreciation on some of the items.
14. Office Supplies & Software
Photographers regularly use office supplies such as Envelopes, Folder, Paper and Pens when writing Commercial Plumbing proposals or reports, visiting homes to customers and mailing or sending paperwork.
If you use any software to contact potential customers, keep track of your offers, Contact current customers or keep track of your finances using software such as QuickBooks.
- CRM( Example Sales Force)
- Marketing System like Mail Chimp
15. Employee Payroll & Payroll Taxes
If you have employees that work for you such as receptionist, admin, bookkeeper or sales support, you pay them on hourly or salary basis.
You can deduct their W2 Salary and any employer payroll taxes(Such as FICA, State Unemployment Taxes) that you pay in addition to the payroll.
16. Retirement Plan Contribution
It is important to start putting away money for retirement. You can not only have money available when you are older but you can save a thousands of dollars if you
There are a several good plans to choose from; We have provided top 3:
2022 limit is the lesser of $61,000 or 25% of income. As self-employed, this plan allows Photographer to invest significantly more money each year into retirement versus the traditional IRA plan.
Keep in mind that if you do have employees other than yourself or your spouse, you’ll need to match whatever contribution percentage that you elect for yourself, for your eligible employees as well.
IRAs(Traditional & Roth)
2022 limit for Traditional IRA is $6000 and $7000 if you are over 50 years old. If you don’t want to put a large amount of money away, then a Traditional(Pre Tax) or Roth IRA(Post Tax) might be for you.
2022 individual contribution limit is $22,000, $27,000 if over 50. However, like a corporate 401k, your company can also contribute to this plan – as much as 25% of your compensation. The max individual plus business contribution to this plan can be as high as $58,000 or $64,500 if over 50, for 2022.
Key requirement is you need be self-employed with no employees in your business( Basically you and your spouse only) It is ok to have independent contractors as long as they are properly classified.
17. Legal Or Professional Services
If you pay an Attorney, CPA or a bookkeeper for your photography business, you can deduct these professional fees.
Don’t forget to issue 1099M or 1099 NEC as needed. See our guidelines for 1099s.
18. Set up a S Corporation for Photographers
Photographers can save thousands by incorporating their business as an S-Corp election(Form 2553), plumbers can save thousands or even tens of thousands of dollars on self-employment tax versus being a sole proprietor.
The IRS typically charges self-employed business owners 15.3% for self-employment (12.4% for social security and 2.9% for Medicare).
If you are a Sole Proprietor
If you haven’t set your company up as an S-Corp, you will pay this 15.3%, in addition to your income tax, for all of your adjusted gross income.
For example, if you earned $100,000 in after deductions, adjusted gross income, your SE tax alone would be $15,300 (not including what you’d pay for income tax).
Your Business Setup as an S-Corp
If you set yourself up as an S-Corp, you will pay yourself a reasonable salary and also receive distributions(K1) Based on number of hours work if a plumbers salary is around $40,000 annually then the Shareholder will take 40k in w2 and 60k in K1
Going back to our example of $100,000 adjusted gross income, let’s assume you paid yourself a salary of $40,000 and took $60,000 in dividends.
In this case, you’d only pay the 15.3% SE tax on the $40,000.
In this example, your self-employment tax is $6,120, effectively lowering your tax burden by nearly $9,000.
18. Merchant Credit Card Commissions
If you are a Photographer that accepts credit cards from your customers, then you may be aware that credit card companies charge you a commissions. For example visa and master card may charge from 1.5 to 2.5% commissions and American Express may charge from 2.5 to 3.5 per cent commissions.
You are allowed to deduct this commissions from your income as an expense. You can typically get a printout from their online portal of how much commissions you paid during the year or you can download their monthly statement and total the amount and provide to your tax preparer or accountant.
Finally, Tax Deductions for Photographer in 2021-2022: Ultimate Guide provides comprehensive list of expenses for Photographers
These deductions can help you lower your taxes. These will only benefit you if you track them and keep supporting documents.
Use this Ultimate guide as a reference and discuss these with your CPA and see how they apply to your tax situation.
1099 NEC Forms are Due January 31st
If you paid subcontractor contractors such as Other Photographers, Helpers, lighting company, or stagers, don’t forget to issue them a 1099 NEC form by no later than January 31st each year to not receive a penalty.
See IRS page here for more info about 1099 Forms