Photographers – 12 Commonly Overlooked Deductions That Can Add To Your Bottom Line

Tax day is creeping up on us once again. And if you are like most photography business owners, filling out tax forms are anything but a fun time. Whether you do it yourself, or hire someone else to do it for you, nothing can make the experience a little more bearable is seeing the word “refund” instead of finding out how much more you owe.

With thousands of pages of code and a plethora of changes that occur every year, its easy to miss things that could impact your bottom line. Check out these commonly overlooked deductions to see if you qualify for more this year.

1. One of the most overlooked credits is the American Opportunity Credit, which has been extended through 2012. This credit allows eligible taxpayers to claim up to $2,500 for each of the first four years of college for each student. Whether you or a child is currently in college, this credit is nonrefundable, which means you could get back more in a refund than you paid in.

2. Have you donated anything to charity this year? While you’ve probably cleaned out your closets a time or two, don’t forget about the things you’ve donated for your business as well. A donated portrait session still has value.

3. Mileage can be a huge bonus to your bottom line. In many cases, you probably use your car for personal and business. Everything business related can be deducted. Also include volunteer mileage as you are driving to and from charity functions. While you do have the option for reporting actual expenses or taking the mileage credit, the mileage credit is usually the easiest way. Keep a log handy in your car and record everything you do for business. [Read more…]

Photography Studio – Going Out Of Business

How long can a photography studio stay in business if it isn’t making any money?

I came across a photography site today in which the photographer had listed prices. I won’t use names – but I guarantee you can find prices like this on many, many different sites.

Event fee $300, includes photographer and assistant for 3 hours of time, plus a DVD with images. Additional hours available as needed.

So let’s do a few calculations.

$300 for 3 hours of work – that’s $100 an hour

Let’s assume an hour each before and after the event getting organized – down to $60 an hour

Let’s assume 3 hours of meeting time to book the client and to deliver the DVD and final products – down to $37.50 per hour

Let’s assume 2 hours of production time, transferring raw images to computer, editing and burning DVD – down to $30 per hour

Normal business expenses:

  • Vehicle
  • Gas at $4 per gallon – depends on the distance of the event
  • Camera equipment costs
  • Costs of brochures, business cards, paper, envelopes, advertising – everything to bring in the clients
  • Rent
  • Office supplies
  • Phone expenses
  • Utilities

Okay, with all of those expenses to add up, I’ll be conservative and say it costs about $30 per hour – which means we’re now down to $0

Oh, and did I mention that there are two people at the event – which means you have to pay that second person per hour – I guess we’re now into the negative.

And does this person really have a chance of making a huge additional sale? They are giving away the DVD, so I think chances are pretty low.

Becoming a professional photographer means you have to make money. You have to give yourself a profit, and pay yourself for your expertise.

If you don’t, you’ll be hanging that Out Of Business sign very soon.

What can you do? Charge what you’re worth, and charge to run a profitable business. One of the reasons our studio became a Six Figure success in under two years is because we charged what we were worth for our services. We made sure our expenses were completely covered – including our own salaries – and made a healthy profit on top of it all.

It doesn’t take luck to become a Six Figure Photographer. It takes business planning. What are you doing to guarantee your success?