Buddies and Photography

[HowardE]

If you have set up a business then you are facing double taxation ---
The dollars coming into the business are taxed and your income as an employee is then taxed again!!!!

MDs that tried the individual incorporation route with the double taxation to protect private assets discovered this and the trial lawyers were still able to pierce the corporate veil in malpractice cases and still attach the individual assets, which is why you don't find as many private corporations as you used to in medicine...

We're an LLC.

 

[PaulChristenson]

We're an LLC.

Enough said...Tax season always gives me an upset stomach...

 

[Cacia]

me too. waaaaaa. oh well, my accountant in cali says I have until Monday to file my extension. see...I am right on top of things...no reason to rush when I can be on SB.

 

[Puffer Fish]

Ok... to further explain - The purchase of photography equipment is categorized as the purchase of assets held by the business... These are not expenses, and are depreciable each year, as a "fixed asset" of the company. These don't go against profit and loss.

What does count towards profit and loss (as I understand it is)

The photo paper, framing, and other purchases which go to the actual printing and selling of the photos - is a purchase of "inventory" which is a "current asset"

So let's say you spend $20 (just for round numbers) to print, mat, and frame a photo. You sell the photos for $40.

Sale of items $40 - Cost of goods sold (20) = $20 profit

The photo sales are easy profit even if you only mark up 20-40% instead of a full 2X markup on the COG.

In other words. You don't need to cover the "expense" of the equipment over the short term to make a technical profit on paper.

You also don't need to make A LOT of money... just $1 over COG is profit when you factor out the cost of equipment vs. cost of goods being sold which is the photos themselves. The camera and printer is the equipment you need to make the goods, and is not really an expense.


Also - in my case. I own 2 seperate companies that DO make a profit. I could easily add the photography biz as a division of my other business, and that's that.

As always, your businss sense is elegant. Our company (ok, it is a 2 billion dollar one), picks expense versus capital depreciation based on the cost. If you want to stretch out the depreciation, it is capital, if not, then it is an expense, like paper. Currently, we are using $1,000 as the cutoff, although I know that some special equipment (like computers) have different rules.

I know there is some flexibility, because we moved the number up and down, depending on the amount of profit expected.

Right now, almost everything I am buying is expensed as a business cost (except the computer), but we are doing well right now.

 

[Diver Dennis]

Nice avatar Puff!

 

[HowardE]

As always, your businss sense is elegant. Our company (ok, it is a 2 billion dollar one), picks expense versus capital depreciation based on the cost. If you want to stretch out the depreciation, it is capital, if not, then it is an expense, like paper. Currently, we are using $1,000 as the cutoff, although I know that some special equipment (like computers) have different rules.

I know there is some flexibility, because we moved the number up and down, depending on the amount of profit expected.

Right now, almost everything I am buying is expensed as a business cost (except the computer), but we are doing well right now.

Thanks Puff :blush:

 

[Puffer Fish]

Nice avatar Puff!

Thank you Dennis, from an image I took in PG.


I may not have mister fancy stobe color, but I do have detail - Puffer eye - thought it was appropriate.

 

[RonFrank]

Right now, almost everything I am buying is expensed as a business cost (except the computer), but we are doing well right now.

When I was doing pro photography on a more full time basis, I expensed everything. I'm not sure if the rules have changed, but I had a choice, depreciate the equipment, or expense it. So if I spent 2K on a lens, I just wrote it off. This may not be the best approach over time, but that depends upon how often you turn over equipment.

As Howarde pointed out, supplies like paper and ink are expenses, and result in a direct writeoff of those amounts in the year they were purchased.

If you make a couple thousand selling prints then expensing is a good way to get a tax break. If you are in it for the long haul discuss the options with an accountant because there are pro's and con's with any approach. The reality is that Uncle Sam has his right hand out, and a legal system in his left, and like the grim reaper, he will not be denied! :11doh:

I did have an accountant, so it was all legit. There are always exceptions when it comes to what qualifies under the various tax laws, and the rules change all the time, but there are a LOT of things that can be done from an accounting standpoint involving how one wants to pay taxes.

Just ask the CEO's from Enron, Worldcom, and Quest!!!

 

[TSandM]

I realize this thread has been dormant a while, and had gone well astray from the original post, but I wanted to share my reactions from my dives yesterday.

I've been diving regularly with DoubleDip -- we both did Fundies, and got provisionals, so we've been practicing up a storm together. We've gotten quite used to being in the water with one another. But yesterday was the first day we've gone diving with no purpose other than to have fun, and I had told DD to bring his camera along. My husband insisted I take one of his as well -- I'm no photographer, above- or underwater.

Anyway, we did three dives. The first two were what I'm quite used to, from diving with people who take cameras. Dive along, buddy sees photo subject, hover and wait. (Although DD was great about making sure I got to come in and see whatever it was after the pictures were taken!)

But the third dive was with BOTH of us with cameras, and it went very much as the OP described in the first couple of pages of this thread. We stayed very much together, very much in communication, and we traded off taking shots. For the time it took to compose and take the picture, I was definitely not watching my buddy, but he was watching me. And as soon as the picture was taken, I'd look over and check him. I don't think it was much different from when I'm shooting a bag -- that's something else where my attention is on the task for x amount of time, then check buddy, then task . . . And just like during a bag shoot, had my buddy's light gone amok, I'm pretty sure I would have aborted the photograph and turned quickly to deal with the problem.

So, from my admittedly limited experience as an underwater photographer (n of ONE!), I think OE2X is right. If you've trained your underwater procedures and your buddy awareness, all it takes is a little adaptation and there you are -- two people taking pictures, but remaining in contact and still being there for each other.

 

[Larry C]

I agree completely. My wife and I dive together pretty much constantly. I'm the picture taker (I won't grace myself with the term photographer) she's the spotter and fun diver. I try not to take too long on a shot, and she stays within bubble spotting distance. I shoot and catch, she periodically turns to make sure I'm still behind her. As we're typically in 10-20 ft. Monterey vis, I think we do pretty well at keeping track. Haven't had to do a lost buddy drill yet.