Income tax for photographers and as it pertains to their photography business tends to be challenging. So first things first, photographers, please save all receipts that pertain to business expenses! If you get audited, the IRS will want proof of any expenses (deductions from income) you have claimed on your tax return. And as business owner you need to know BOTH your profits and your expenses. Ideally you should be recording these expenses in a monthly profit and loss statement, but first things first, just make sure you are saving the receipts!
Photographers are always frustrated when it comes to organizing (and saving) their receipts. Some use the method of just throwing them all into a box and hoping for the best when tax time arrives. Others have a dedicated binder with folders for each month of the year. Either way, it is paper clutter…How about digitizing those receipts??
There are two great options to consider…either the do it yourself option, or the hire someone else option…
I try to outsource what I can so I am a fan of the hire someone else option. That’s where Shoeboxed.com comes in. For $10 a month ($99 a year) you can send your receipts to them and they will scan them into your account. When tax time arrives and you need to look up a receipt – you just go to Shoeboxed.com and there it is…searchable by text!
But it’s more than receipts, how about business cards? After every photography conference I come home
with a stack of cards that become clutter in my desk drawer. Just send them to Shoeboxed and BANG, you are digitizing your contacts! Check out their plans here.
If you are running a larger scale studio you might be interested in the Quickbooks integration that comes with their more expensive Business tier service. Personally I haven’t tried this, but it sounds killer.
Some folks don’t want to pay monthly or yearly service fees and I completely understand that. You want to save and go the DIY route. There’s a great option for that as well and it comes from the The Neat Company who has two scanning units, NeatDesk and NeatReceipts. You purchase one of the scanners packaged with software (Mac or PC) and then you can scan your receipts onto your computer. The software then allows you to organize and search. I just read that this company now has a “cloud” option for a monthly fee but I don’t know much about it.
Whatever you choose to do, just make sure that you keep your receipts so that you know your business expenses. These expenses off-set your income and will help you avoid paying more income taxes than you should be (on profits that you didn’t necessarily have). And receipts also give you the ammo needed to determine how healthy your business is and what you might want to tweak when it comes to spending.
The FTC wants me to let you know that if you buy something from one of those links above, I might just get a commission. But I told you about these products because I think they can help you run a healthy photography business and…I figure it doesn’t hurt to make a few bucks here and there because I have a ton of school loans to pay off!