One of the most lucrative side hustle businesses to start is a photography business. With the right amount of training and equipment, anyone can be a photographer. There are no licensing rules and few relevant certifications — it basically comes down to having the ability to work hard, take great photos, and book photography gigs.
That being said, starting a photography business can be expensive given all the equipment you’ll need and all the travel you’ll be doing. Fortunately, there are a lot of relevant tax deductions to help defray some of the high costs.
Here’s what you can deduct when you’re a photographer:
If you purchase equipment for your business, it is tax-deductible. If it’s designed to last more than one year, such as computers and cameras, then it’s considered “capital property.” With capital property, you have two deduction options.
If the equipment qualifies, you can deduct the entire cost of the equipment in the purchase year using the Section 179 deduction. It’s considered qualified property if it is tangible, depreciable, personal property that was used for your business and put into service that year.
Or, you can deduct a percentage of the cost spread out over several years as depreciation.
Which you choose will depend on your tax situation and how much income you earned in that year, but for most businesses, it’s better to claim it as a Section 179 tax deduction so you can deduct the entire cost of the equipment.
Under tax reform, if you buy equipment for your business you may be able to benefit from an almost doubling of the amount you can expense from the 2017 Section 179 amount of $510,000 to $1,020,000 for qualified business equipment like computers, printers, and office furniture. The amount you can deduct is still limited to the amount of income from business activity.
You can deduct your business travel from your business income. This includes travel to locations, venues, and meetings where you will be conducting business. This can include traveling by car, plane, train, or any other mode of transportation.
If you use your own vehicle, you can deduct the mileage at the IRS standard mileage rate for business travel. For 2019, the standard mileage rate is 58 cents per mile (57.5 for 2020). If you travel on a common carrier, like through an airline, you can deduct the cost of tickets.
For records, keep a mileage log including your starting and ending mileage for the year.
Do you run your business out of your home or do you have a separate office?
If you run your business out of your home and you have a dedicated area for business purposes, you can claim a home office deduction. There are two ways to claim this deduction: You can either claim a percentage of your home expenses like mortgage, utilities, electricity, insurance, etc, based on the percentage of space used for your home office, or you can take the simplified home office deduction up to $1,500 ($5 per square foot up to 300 square feet).
If you rent office space, you can also deduct the cost of the space but you cannot deduct both a home office and a separate office.
Training & Education
If you pay for training or special education, whether it’s in a classroom setting, online, or a workshop; you can usually deduct these costs. If the training required you to travel and pay for lodging, those expenses are deductible too.
If you had to pay for licensing or classes in support of a license or certification, those are tax-deductible.
Other Common Business Expenses
If you have a business cell phone or pay for internet service, those are expenses you can claim on your taxes. If you have any membership dues or subscriptions to industry magazines, you can claim those as well.
Finally, advertising or marketing costs are tax-deductible. If you pay for Facebook ads to promote your business or take out classified ads in your local paper, those are tax-deductible costs.
Things That Are Not Deductible
There are two costs that seem like they should be fully deductible but are not.
The first are gifts; you may wish to give a gift to your clients but you can only deduct up to $25 per gift.
Meals are not fully tax-deductible either. When you entertain clients, or even when you eat a meal by yourself while on business travel, you can only deduct 50% of the total cost of that meal. Entertainment expenses for your clients are no longer tax-deductible under tax reform.
While starting a photography business has some high upfront costs, tax benefits for self-employed can help lower the taxes you owe.
Don’t worry about knowing these tax rules — TurboTax Self-Employed will ask simple questions about you and your business and give you the tax deductions and credits you’re eligible for based on your entries. TurboTax Self-Employed searches and uncovers industry specific tax deductions that you may not even realize you’re eligible for.
If you have questions, you can connect live via one-way video to a TurboTax Live Self-Employed CPA or Enrolled Agent with an average of 15 years of experience to get your tax questions answered. TurboTax Live Self-Employed CPAs and Enrolled Agents are available in English and Spanish, year round and can even review, sign, and file your taxes.
TurboTax Self-Employed also comes with a year of Quickbooks Self-Employed for free. Quickbooks Self-Employed allows you to track your business income, expenses, mileage, and capture your receipts year-round. You can then easily export your information directly to your TurboTax Self-Employed tax return.