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12/23/2004 10:50:27 AM · #1 |
I'm planing to open a studio with a friend around Oct/Nov 2005 and I'm anxious to start purchasing my equipment now. The question I have is, if I purchase the equipment in Jan. 2005 but I dont register the business until October... will I be able to depreciate my equipment (that I purchased in Jan of 2005) for the 2005 tax year? Hope that makes sense. Thanks.
Russell |
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12/23/2004 01:11:52 PM · #2 |
| you can take full deductions for about 20k a year for equipment. after that, it is depreciated, and then, typically, by year, not by month. however, this is a better question for the accountant you will hire to help you get off on the right foot... |
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12/23/2004 02:23:43 PM · #3 |
I just dont want to purchase the equipment in a couple weeks and then not be allowed to deduct that on the 2005 taxes since I wasn't technically a business at the time of purchase.
I do plan on getting an accountant but santa has his eye on a couple L's and a Mark II. :)
Originally posted by skiprow:
you can take full deductions for about 20k a year for equipment. after that, it is depreciated, and then, typically, by year, not by month. however, this is a better question for the accountant you will hire to help you get off on the right foot... |
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12/23/2004 02:42:48 PM · #4 |
Do you have a DBA (Doing Business As) or a Tax ID for the business?
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12/23/2004 02:50:12 PM · #5 |
| Once you start your business, sell your equipment to that business and declare it from that point forward. |
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12/23/2004 02:50:40 PM · #6 |
No..
Originally posted by RHoldenSr:
Do you have a DBA (Doing Business As) or a Tax ID for the business? |
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12/23/2004 02:52:36 PM · #7 |
That sounds like a great idea... is that legal?
Originally posted by Davenit:
Once you start your business, sell your equipment to that business and declare it from that point forward. |
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12/23/2004 03:19:53 PM · #8 |
As long as it is fair market value, yes. If you are afraid of it, sell your equipment on ebay and then rebuy different equipment through the company.
Same thing really. You are going to need an accountant to get set up so run it by them. They can help you out with any of this.
Good luck and have fun... |
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12/23/2004 03:33:09 PM · #9 |
Thanks!! I'm excited and really eagar to get started... I'm just putting in some time in Iraq to save the money to get it off the ground.
Originally posted by Davenit:
As long as it is fair market value, yes. If you are afraid of it, sell your equipment on ebay and then rebuy different equipment through the company.
Same thing really. You are going to need an accountant to get set up so run it by them. They can help you out with any of this.
Good luck and have fun... |
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12/23/2004 04:58:47 PM · #10 |
All you have to do is say it outloud, "I am a business as of right now". Now you can right off your equipment, as long as you attempt to make a profit. You wont want to right off the intire amount the first year though. You are allowed to right it off over several years. If you have no income to take if off you wont want to take much of it till it starts rolling in.
btw- some states might have laws that differ from the federal tax laws so if your worried about state taxes I would go ahead and talk to an accountant.
Tim |
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12/24/2004 05:32:34 AM · #11 |
Originally posted by xcharrier:
No..
Originally posted by RHoldenSr:
Do you have a DBA (Doing Business As) or a Tax ID for the business? |
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Truly reconsider this particular stand. Talk seriously to those that have studios in your area. From the sounds of your post, this is a new venture for you and perhaps the first business you have started.
Who are your business advisors going to be? An experienced accountant is certainly a key one.
For possible business info read: ASMP Professional Business Practices in Photography 6th edition ISBN 1-58115-197-7
Best of luck in your venture.
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12/24/2004 05:52:05 AM · #12 |
Start two businesses one for photography one as a rental company. Sell all your equipment to the rental company, then rent the equipment to your photography business. That way if you ever get sued they can't take your equipment, because, it is only rented. You can also depreiciate the value of the equipment on a rental bases, as well as deduct the amout your photography business pays to rent from your rental company. Does that sound complicated, think about it for a minute, it works.
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12/24/2004 06:26:25 AM · #13 |
I am not a tax person, but have done some sole-proprietorship stuff and this is what my tax guy tells me/ makes me do / lets me do:
With a home office I can depreciate things last last beyond 1 year (computer for example).
I can take the full deduciton for CODB stuff (cost of doing business) - advetising, bix card printing, office supplies, business trips, etc. On you car the best thing is to track each and every trip for bisiness - date, mileage, wht the trip was for. You get somehting like 36.5 cents a mile. That adds up, believe me. When i was a Realtor that was my biggest deduciton!
Other things, but these can get trickier: cell phone, internet/web site, etc - IF they are used for business.
Home office: the room(s) must be for BUSINESS ONLY (not part of your bedroom for exapmple). You can then deduct that % sq foot wise of your taxes. martgage, utilities, mainteneance - this adds up. And you can deduct some tings twice if you itemize (taxes and interest for example).
You get to deduct for the whole year i believe, but you should check on this.
As to whetehr you rent/sell it to the company, that depends onyour partnership agreement - you legally don't need it in writing, but you are fool if you don't.
As a partnerhsip, each of you are wholly liable for the business and it's debts - so if the bride sues you, she can take your house. This is where corporations come in, and to some extent limited partnerships. How you claim income and pay taxes will vary by type of partnership. Is it 50/50? Are you both going to bring 50% of the business's assets to the business (you the studeio equip, him the camera, or the building or ... - this is why you need it in writing! if your parnter decides to screw with the money/assets/bills/his taxes, YOU are then liable for for those debts.)
Good luck. It is not nearly as scary as it first seems. Great leaning experience.
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12/24/2004 07:04:56 AM · #14 |
| Yes, if you decide you are in business, you can writte off any equipment purchases (in several fashions). Travis99's suggestion of two businesses only makes ense if they are coprporations. In a sole-proprietership or partnership, ANYTHING you own can be taken, whether or not it was part of THAT business. |
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12/24/2004 07:11:02 AM · #15 |
And if you have a corporation, the mean old banker will get your personal guarantee for any loans he will write to you. That way you can't walk away from your loans without having any personal liabilities. Friggin bankers !!!
Originally posted by vontom:
Yes, if you decide you are in business, you can writte off any equipment purchases (in several fashions). Travis99's suggestion of two businesses only makes ense if they are coprporations. In a sole-proprietership or partnership, ANYTHING you own can be taken, whether or not it was part of THAT business. |
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