question, looking for thoughts...

I posted this previously in a thread but didn't receive much feedback. I would like to know what people think on the topic. I have searched the idea in this forum and read alot about it. Here goes...

What if one just enjoys photography and other people know this and, on occasion, these people offer to pay this amateur to take photos of events and so forth (pics of their children, group photos, yadda yadda yadda).

My question is...would it be prudent for the amateur to go through the "relatively" low initial investment to set him/herself up as a business, knowing that he's not going to make a whole lot of money but taking advantage of any tax breaks that may exist (even if for 3-5 years).

I enjoy photography and I don't know where my fun and occasional paying customer will take me over the next five years but while I buy more equipment (that I would certainly use for the occasional paying customer) and upgrades in software (PS 7 to CS) that is used to edit the photos for the occasional paying customer, should I call myself a business and take the deductions?

I guess if (1) person pays you to take pictures (this statement can and has started a thread of its own), you're a business.

I'm interested in what people think. I'm a cop full time and don't wish to leave my day/night/early morning job, but I do get offers to photograph for money, I do find myself first at the scene of some interesting events that could sell as photos and have often thought about this.

Thanks

Sean7531 said:

I guess if (1) person pays you to take pictures (this statement can
and has started a thread of its own), you're a business.

I'm interested in what people think. I'm a cop full time and don't
wish to leave my day/night/early morning job, but I do get offers
to photograph for money, I do find myself first at the scene of
some interesting events that could sell as photos and have often
thought about this.

Thanks

Click to expand...

I would say thake the money on the side, the paperwork for the IRS isn't worth the effort. I've been paid to shoot, but have no plans to incorporate any time soon...(G) Spend it on a lens, or a flash card, or a case of beer. The revenuers don't have to know!

As for the last paragraph... I wish I could post some of my pics. Most people wouldn't even want to see them, but there are the always the strange sort that like to see pictures of semi-headless people, or weeks old decomps. Most of them would go away if I could include the smell..(G)

You might wish to check with your department's legal counsel about the legality of the idea... I agree that news agencies would pay dearly for some of the pics I take, but they aren't for the public. They are for the jury.

My .02, if it's worth that!

--
Crime Scene Photography

Thanks for the reply. It's nice to see someone in the same line of work (dayjob, that is). Out of curiosity, what type of cameras does your agency use for their crimes scene photog. We are currently looking into the possiblilty of going to digital but waiting for an ok from a prosecutor before making any decisions. And, are there any schools that you are aware of on the East Coast (or close to) that are good for crimes scene photography. I think I'll have my Agency send me to one or two!
Thanks again and stay safe.

Also, when I spoke of the strange pics that I come across, I meant more along the lines of... the pack of foxes that feed on the trash can at a local Wendy's restaurant at 4am, natural disaster (flood) type scenes, etc, I wouldn't think to try to make money, or even release, pics that are from a crime scene, etc.

sean7531 said:

What if one just enjoys photography and other people know this and,
on occasion, these people offer to pay this amateur to take photos
of events and so forth (pics of their children, group photos, yadda
yadda yadda).

My question is...would it be prudent for the amateur to go through
the "relatively" low initial investment to set him/herself up as a
business, knowing that he's not going to make a whole lot of money
but taking advantage of any tax breaks that may exist (even if for
3-5 years).

Click to expand...

Listen up Pal, I know, did I use 35 frames or was it 36. Well, are you
willing to take that chance.... well, are you amateur? Being how this
camera is one of the most expensive D...s...l... r on the market and
seeing how it will blow your litle P*S right off the MP chart, are you
sure you really want to take that chance?

Oooops.... sorry.....

You have a nice little hobby here..... keep it that way with the advice
of your accountant. Off set the cost of "hobby" but do not make more
than the costs.......

Book em...... let the pros have the business expenses and costs.....

HB

I assume that your day job as an officer of the law allows you to be up and close to scenes that many could never get to. I am also sure that there are rules which chat about these queries. I am also assuming that anything you photograph while on the job may be considered the property of the law enforcement agency of your employ. Which I assume would mean that any monies you recieve would have to be turned over to that said agency. With that in mind, any photos or monies collected as income after expenses (or before) are to be included on your tax return for that particular year. This is just a bit of feed back from my Professional Procedures classroom...
--
I love photography

Thank you, but here's the part you missed....

"Also, when I spoke of the strange pics that I come across, I meant more along the lines of... the pack of foxes that feed on the trash can at a local Wendy's restaurant at 4am, natural disaster (flood) type scenes, etc, I wouldn't think to try to make money, or even release, pics that are from a crime scene, etc."

That comes from a sense of professional ethics, it has nothing to do with IRS forms.... But I guess that it's good to see that actually people fill classrooms to be told the same... I sure am glad that I didn't have to pay a college professor to learn about ethics. Also, if you read the initial post, I was inquiring into photography as a hobby that could generate income from, I believe I worded it as group photos, events, portraits etc, I didn't mention crime scenes.

jpringlephoto said:

I assume that your day job as an officer of the law allows you to
be up and close to scenes that many could never get to. I am also
sure that there are rules which chat about these queries. I am also
assuming that anything you photograph while on the job may be
considered the property of the law enforcement agency of your
employ. Which I assume would mean that any monies you recieve would
have to be turned over to that said agency. With that in mind, any
photos or monies collected as income after expenses (or before) are
to be included on your tax return for that particular year. This is
just a bit of feed back from my Professional Procedures classroom...

Click to expand...

Report all income to accountant.

Hobby: you generate less than costs. You can still generate income.

Business: you must make profit in x out of y years according to your state
regulations and laws.

Accounting: Find a good accountant that knows the difference.

centralcoastmagazine said:

Business: you must make profit in x out of y years according to
your state regulations and laws.

Click to expand...

This is an old wives tale that started with an IRS examiner guideline that basically says that if you are making a profit in your third year, then you are likely to be a legitimate business. There's no limit to how long you can lose money - as long as you can satisfy the IRS that you are a legitimate business and really trying to make a profit.

Sean7531 said:

Thanks for the reply. It's nice to see someone in the same line of
work (dayjob, that is). Out of curiosity, what type of cameras
does your agency use for their crimes scene photog. We are
currently looking into the possiblilty of going to digital but
waiting for an ok from a prosecutor before making any decisions.
And, are there any schools that you are aware of on the East Coast
(or close to) that are good for crimes scene photography. I think
I'll have my Agency send me to one or two!
Thanks again and stay safe.

Click to expand...

We are currently using Nikon CoolPix 5000 kits for the CSI's. There are a lot of other cameras floating around the department, such as Kodaks and Minoltas, that other units use. Patrol has 5 Kodak DCS-2000 (?) ruggedized and partially weatherproof 2 megapixel cameras that they use, so that we don't have to come out to every scene. We also have a Nikon D100 in the lab, but it doesn't get a lot of field use. We just got it back from Nikon, sent it in because the pictures were horrible. We also have a Canon G5 that was the reason we sent the D100 in, it was taking better pictures out of the camera than I could get with the D100 and Photoshop. In the next month or so, we will be switching CSI cameras to Canon 300D's, over my strenuous objections. I want D70's... (G) But this lab has a lot of Canon EOS gear from 35mm film days that will work with the Digital Rebel, so money won out over a better camera.

I don't know of anything on the east coast, I'm in the midwest. I have attended training from the Institute for Forensic Imaging, out of the University of Indiana, that was outstanding. The instructor is one of the people that wrote the book on police digital imaging, the other author is the director of the institute. Here is a link to their site...

http://www.ifi-indy.org/

Another good place to look is:

http://www.theiai.org

the International Association for Identification. There are links there to local chapters, and from there you can usually find something interesting int he way training, including photography.

Good luck, whichever way you go!

One hint on choosing a camera... it has GOT to have a hotshoe and external flash gun. Those little blinkers built in to the cameras just won't work for crime scene stuff. I get cards from patrol units all the time where they tried to take photos at a night scene, or a dark inside scene, and it just doesn't work.

sean7531 said:

Also, when I spoke of the strange pics that I come across, I meant
more along the lines of... the pack of foxes that feed on the trash
can at a local Wendy's restaurant at 4am, natural disaster (flood)
type scenes, etc, I wouldn't think to try to make money, or even
release, pics that are from a crime scene, etc.

Click to expand...

Ahhh... I see. Misunderstood your intent. You can probably get some really good stuff on midnights, I worked that shift for 6 years. I liked it, but the family didn't!

--
Crime Scene Photography

Thanks again, that was a ton of good information. I think the Dept is getting ready to buy some smaller digicams for the patrol cars and I know that they're looking to upgrade to digital for the investigations. Hopefully, they'll ask for my, and others, .02 cents instead of calling the local camera shop and buying whatever the guy a the counter recommends.

You have to convince the IRA you are a legit business.

I would like to incorporate myself as a photographer and musician too. Then I can write off the camera/music instrument purchase. My business loss can be deducted from my income. Then when I go out of business, I can puchase the assets for 10 cent on the dollar.

Lots of people tried this road. It usually leads to trouble unless you are sophisticated in tax.

Remember, the bigger the savings, the bigger the penalty if you mess up.

And if you are a real business, people can hold you responsible for damage. They can sue you for all your photo gear if you mess up a wedding. And if you are not careful, they can sue you for your house.

I understand the hobby rule and I can say that (this year) what I do would be more of a hobby. But as more people ask me to photograph an event for them (and I have NO desire to shoot a wedding, my day job is enough stress for me), I guess what I feel is that if it WERE to evolve into a Part time business for me that would generate income that would be used to feed my family, as I buy things now that I use for the "occasional" jobs, ie, my Photoshop upgrades, my camera lenses, etc (the smaller stuff, so to speak as well as possibly upgrading in camera) should I call it a business now rather than just eat it and when I do start to make money, I already own all of the equip and I won't have any receipts in my first year to write off! (I guess I could sell my business my equip). I do have an idea for a business that I haven't seen done yet, that could generate a decent amount of income (based on what the "pros" charge for an 8x10 picture) and I would love for it to be a profitable company. I really am not looking for a way to cheat the IRS, I agree that it's more a pain in the ass than it would ever be worth to me but in fairness to myself, if I'm starting to generate income this year, shouldn't I take the deductions this year.

A further example,

I was recently asked to shoot a fashion show (low budget). I took some pics last year (with F717) at the same show that turned out ok. Lighting was bad and I wasn't thrilled with the outcome (they were!). If I were to shoot this show for them, I would prob consider plunking down the $$$ and buying a DSLR for it. I definitely won't get my return on investment from this gig, but as they show the pics on their website, etc, The pics from a fashion show, taken w/ a better camera, with my name attached will possibly generate more people wanting me to take pics of their event/child/house/car whatever. And if I were to begin charging people what the "pros" charge people (so I'm not accused of undercutting) then If I didn't buy any equip next year and made $1000 in the year, then yes, I would have made a profit.

So, I believe that, with a sort of business plan, a potential to show a profit in year 2 (as small as it may be) should satisfy the IRS. My wife is a bookkeeper so I'm not concerned with having to learn the ins and outs of bookkeeping.

And thank all for your feedback, I'm interested in people's thoughts and experiences on this topic. THere may be people out there that did set up as a business and thought it a mistake, others that, like me thought that they didn't want to make a whole fortune in taking pictures for people here and there and did. It's interesting to hear views from different people. That is what the forums are all about and what makes them successful.

TugBoat said:

You have to convince the IRA you are a legit business.

I would like to incorporate myself as a photographer and musician
too. Then I can write off the camera/music instrument purchase.
My business loss can be deducted from my income. Then when I go
out of business, I can puchase the assets for 10 cent on the dollar.

Lots of people tried this road. It usually leads to trouble unless
you are sophisticated in tax.

Remember, the bigger the savings, the bigger the penalty if you
mess up.

And if you are a real business, people can hold you responsible for
damage. They can sue you for all your photo gear if you mess up a
wedding. And if you are not careful, they can sue you for your
house.

Click to expand...