Tax write-offs...
What does that mean?
Entrepreneurs are always talking at the end of the year about writing things off.
Today, I'm going to dig into what that is and what it means for you and your business.
Let's start with the basics.
To write something off means that you're deducting it from your income and you don't pay tax on it.
This is one of the perks of being a business owner.
You can buy things that you would like to buy for fun, but because you're using them in your business to make money, you get to write them off.
Which saves lots of money in taxes.
I'm not an accountant or a lawyer, so you want to check with your accountant to see exactly what's deductible in your area and make sure you're taking every benefit that you can to the extent of the law.
At a high level from a photographer, I want to talk about what those things are.
Gear and Equipment Tax Write Offs for Photographers
The obvious one is gear and equipment.
Cameras, flashcards, computers, cords, websites, web hosting, camera bags, lighting equipment and anything you use for your business you can write-off.
Think about anything you're buying in your personal life that you hadn't thought about writing off but you're using it in your business.
You need props for your photo sessions, so you can write those off.
And if you're a home-based studio or your location only, you've got to store those cute props somewhere right in your house.
That might be cute stools, or throws, and blankets, and pillows, and things like that.
Education Tax Write Offs for Photographers
Next, education.
This is the one that most people don't think about.
If you're going to succeed in your photography business, you must have education.
You've got to study and learn how to do it.
Anything from magazines that you buy that are business-related to online courses.
If you're learning photography, taking a course from someone, going to conferences, going to workshops, or hiring coaches, all of this can be written off.
Travel Write Offs for Photographers
Fourth, travel.
Travel expenses are deductible.
You want to keep track of mileage when you go to sessions because you can write that off.
Same with the percentage of your auto expenses, auto repair, or car insurance.
If you're traveling to other places for fun and you can book a session, it's deductible.
My Filter for Purchasing Things I can Write Off
I want to caution you to not overbuy because you are thinking you'll just write it off.
You likely don't need five new lenses.
You don't want to write your income off to nothing as you build your business.
So, my filter for buying things is “will this help me improve my skills or abilities so that I can make more money?"
If the answer is yes, it's probably a good investment.
My other filter is “do I want this and do I have extra money after my bills are paid to get it?”
If my other bills aren't paid and I'm not taking care of the things I need to take care of, that's an easy no.
Winning in Business is About Making Investments and Getting a Return
We call it ROI (return on investment).
All year and especially at the end of the year, I'm looking at how I can lower the amount of income I pay in taxes by investing in things that will help me more next year.
Then I invest.
I've invested so much in education.
I carefully invest when I'm getting equipment and I truly believe that's why my businesses have grown so fast.
It's also why I was able to lower the taxes I paid while doing these things.
Tax laws are set up to make sure businesses pay their share.
But it's your responsibility to yourself and to your business to make the business decisions that are necessary to grow it so you can provide for your family.
You don't need to pay more taxes than you have to.
So, if you're buying things that you would buy for fun and they help your business, write them off and save taxes.
The more money you make in your business, the more it allows you to make a bigger impact in the world.
Making more money allows you more time with your family and to plan for the future.
I appreciate you and I'm looking forward to 2022 with you.
