Being a self-employed photographer, filing income taxes can be stressful. Even more so if you are not prepared, or are just unaware of what Uncle Sam expects his cut to be, especially when you are traveling for your photography business. These four tips should help.
1. Track your mileage
Other than driving from your home to your business, you want to write down the miles you are putting on your car related to visiting clients, driving to an on location shoot, or other activities directly related to your business. At the end of the year, you can deduct 56 cents per mile, which is the 2014 standard mileage rate. The IRS recommends you keep a logbook in your car and write down the date, miles, and business reason for each trip. Also, write down what your odometer says at the beginning and end of the year. Keep in mind, that when you charge a client mileage, you are not excluded from claiming this deduction.
2. When traveling for your business, you can eat without keeping the receipt
Every professional gets paid per diem when they are out of town for business, but what about the self-employed photographer? Fortunately, you can deduct it. Better yet, you don’t need a receipt from every meal while you are out of town. The IRS just requires you to “keep records to prove the time, place, and business purpose of your travel”. The deduction amount varies by location so look up the per diem rate of your destination at www.gsa.gov before recording it in your expenses. For example, if you travel to Los Angeles to shoot a wedding, your per diem is $12 for breakfast, $18 for lunch, $36 for dinner, and $5 for incidentals.
3. Don’t use your frequent flyer miles for business trips
If you plan to fly out to a workshop or a destination wedding, buy the tickets. When you have a receipt for traveling related to your business, you can deduct that expense in your taxes. If you were to use frequent flyer miles to get a free flight, you can’t deduct anything for it, since it didn’t cost you anything. Save your frequent flyer miles for vacations and other times you plan on traveling, which have no chance of being deducted for your business.
4. In general, keep receipts for business purchases over $75 (required by the IRS)
Even if you track your expenses in a software or spreadsheet, keep the receipts. The IRS suggests you keep receipts for four years after you file your income tax return. The easiest way to keep your expenses in order is to make a list of them for the year. Update the list with purchases as you make them, and then store the receipts in a file labeled “Throw Away in 4 years from…” whatever the date is.
Bonus: Get the Right Look from the IRS
Nate Taylor is a small business consultant and the owner of PhotoAccounting, where he shares tax tips and tools with photographers.