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Thread: My income tax return

  1. #1
    mythlady's Avatar
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    My income tax return

    I am going to allocate my income tax return this year as follows:

    1) A mat cutter (I've already ordered this)
    2) the NIK Complete Collection
    3) Quicken (for my "business")

    I have a show at the end of this month for which I need to get about 20 pictures together, framed, so the mat cutter is something I want to get right now. You all have convinced me that I need the NIK software , and I have actually started a business -- I opened a business savings and checking account yesterday, I'm getting a license, everything I need to get going, so i need the Quicken to keep track of how much money I'm losing (the IRS will allow me to lose money 3 out of 5 years). I have an office/studio space (not to photograph clients, but art-studio kind of space to store all my frames and equipment and mat cutter and so on). I'm on my way, people --

  2. #2
    wilgk's Avatar
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    Re: My income tax return

    That is so exciting! - Well done Elise - we will continue to watch and hear all about your success
    Last edited by wilgk; 2nd March 2011 at 05:32 AM.

  3. #3
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    Re: My income tax return

    You go girl! Congrats and best wishes Elise.

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    Re: My income tax return

    Go, you!! What an excellent start! I wish you all the very best, Elise.

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    jiro's Avatar
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    Re: My income tax return

    My deep appreciation to you for pursuing what inspires you, Elise. Congratulations! Give us a holler if you need some help using NikSoftware products.

  6. #6
    Camellia's Avatar
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    Re: My income tax return

    That's wonderful Elise! Don't forget us when you are rich and famous

    Good luck with your endeavours.

    R

  7. #7

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    Re: My income tax return

    From a former business owner to a future one...you keep a sharp eye out for the IRS...they don't always mean what they say, or say what they mean...first and foremost on that list of yours should have been a great (not just good) bean counter. Good luck and Godspeed.

  8. #8
    maloufn's Avatar
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    Re: My income tax return

    Quote Originally Posted by mythlady View Post
    I am going to allocate my income tax return this year as follows:

    1) A mat cutter (I've already ordered this)
    2) the NIK Complete Collection
    3) Quicken (for my "business")

    I have a show at the end of this month for which I need to get about 20 pictures together, framed, so the mat cutter is something I want to get right now. You all have convinced me that I need the NIK software , and I have actually started a business -- I opened a business savings and checking account yesterday, I'm getting a license, everything I need to get going, so i need the Quicken to keep track of how much money I'm losing (the IRS will allow me to lose money 3 out of 5 years). I have an office/studio space (not to photograph clients, but art-studio kind of space to store all my frames and equipment and mat cutter and so on). I'm on my way, people --
    Elise. Well done ands good luck but for those starters could you please explain what those three items in your list are???

    Nasseem

  9. #9
    mythlady's Avatar
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    Re: My income tax return

    Thanks, everyone -- Naseem, here are details:

    1. I got the Logan 450 mat cutter, which means that I can create my own mats for the photos I have to frame, and I'm not limited to the sizes of pre-cut mats in stores or stuck with paying high prices for having mats with custom shapes created. I'm excited about this, because the mat cutter combined with my new printer (Canon Pixma Pro 9000) means I'm essentially freed from any kinds of standard shapes and sizes.

    2. The NIK software is a collection of plug-ins for Lightroom or Photoshop through which you can achieve all kinds of nice effects, including HDR, and it includes noise reduction and sharpening features. I know nothing about how it works at this point, but lots of folks here do.

    3. Quicken is for keeping track of your financial records, both personal and business. One of its advantages, my husband says, is that it interfaces with TurboTax when tax time rolls around. I had downloaded a free accounting program, but even though it's pretty simple, it was too confusing for my little pea brain, because it required double-entry bookkeeping, which my husband explained to me but which kind of causes my eyes to roll back in my head. I'm an artiste, not a bean counter.

    So there you have it. I also joined the local Art League, which has classes and shows and a newsletter that informs you of all kinds of opportunities, and even though it's more geared toward traditional arts, there's enough about photography to keep me busy, and from what I understand, photographers are making more inroads into the Art League. I'm taking a drawing class (charcoal and pencil) and next quarter another one (pastels -- we get to use color!), and last weekend I took a wonderful workshop on watercolor journaling. I've also signed up for a four-Saturday course on botanical illustration. I have some vague fantasy of combining photography with other kinds of art, but at this point I don't really know what that would be.

    Am I reinvented yet? At this point the only thing that's holding me back is the actual job I have and will have for another 15 months, although I did send out a formal memo saying that I'm retiring at the end of next school year. I'm honestly stopping myself from getting involved in art shows and so on that are coming up (if they would have me), because I don't want to overextend myself. I have the little show happening at my work in April, and then the "Art in the Garden" thing this summer, and then maybe I'll apply to a couple of things next year. And then as of summer 2012, I'll be free! (Well, not completely free, but that's too long and boring to explain.)

    Chris, thanks for the advice on getting a good accountant -- I'm a babe in the woods when it comes to these kinds of things. I'll have to ask around about who people use -- my office mates (a real estate broker and a hydrogeologist) probably have someone they use. I guess the question is for the IRS, at what point does a hobby become an actual business -- only time will tell that, right?

  10. #10

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    Re: My income tax return

    " I guess the question is for the IRS, at what point does a hobby become an actual business -- only time will tell that, right?"

    And this is where it gets dicey...yes, it is true you can lose money 3 out of five years...I say out of one side of my mouth, but out of the other side, the IRS's side, a total dead loss without any gain (even if you lose afterward) is seen as milking the government's cow and it is not looked upon favorably.
    The first year is rarely a problem because you are in the "buying, building" mode but after that...it gets a little trickier. My advice is to be dead cold honest in every transaction and record every single thing you do, meticulously. Keep your out expenses to a minimum and don't spend money on stuff that isn't really about making you or your product better. Advertising is one of those red flags...their take is if you are good enough to go into business, you should have done that research first. Advertising is for those who can afford to throw away money. I''ve written tomes about advertising...total waste of money. (I'll elaborate later.)
    The IRS's position is that if you have a business licence, etc, 1099 whatever, you are in business....it's no longer a hobby. If you cannot find someone local, I have a wobnderful guy I've worked with for 20 years...I live in FL and he lives in MICH...it works because of phones, email and fax....I would be happy to share him with you and he is a former IRS auditor...man knows every trick in the book.

  11. #11
    mythlady's Avatar
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    Re: My income tax return

    Thanks, Chris -- I really appreciate the advice. I really want to see if I can make a go of this, and while I don't imagine it will ever be more than a supplement to my overall income, I would like to see if I can make it profitable, at least in terms of returning a little more money than I'm putting out. I think after this year, my expenses will go way down. I don't intend to soak the government, I really don't, but I don't imagine that I'm ever going to be in the position of owing them a bunch of taxes on my profits -- if I actually made $10,000 one year, it would be a miracle, don't you think? This is especially true because I don't intend to do commercial or contract photography at all, no studio work, etc. but rather to be a "fine art" photographer, which will never be as profitable (since I will never be Ansel Adams). I don't have to support myself or a family with this business, though I fully intend to see if I can get something going. Does that sound like it's still a hobby, I wonder?? I'm also going to go to a small business center in my community to see if I can get some advice that way.

  12. #12

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    Re: My income tax return

    That's a grand idea....small business incubators are great places to get business savvy. The IRS is another place...you'd be amazed at how willing they are to point you in the right direction.....but always pose your questions so that you get an answer and not a question (as much as possible...)

  13. #13
    Peter Ryan's Avatar
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    Re: My income tax return

    Well done Elise,

    I started out slow but things grew so fast. Once you out there and involved you will find you get drawn into it more and more. You will find it hard to keep your mind on work as it builds.

  14. #14
    mythlady's Avatar
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    Re: My income tax return

    Thanks, Peter -- I can see how that happens -- I'm seeing more opportunities I could go after, but since I'm still working, I feel as if I need to hold back and not over-commit myself at this point. But it feels very exciting to have a new profession coming into being, as I'm preparing to leave the old one.

  15. #15
    Peter Ryan's Avatar
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    Re: My income tax return

    I started relatively slowly about 2 years ago with a lot of fear and trepidation about showing my work but things just kept opening up. I keep getting invited to markets and fates, etc but I have to leave time to do the workshops as well and a weekend to cut the grass. The community education centre I have been lecturing at wants me to do a daytime one as well as the evening one, which I just can’t do at the moment.

    I have also just taken space in the fringe festival for the Ballarat International Foto Biennale in August/September and have to start getting about 18 prints and promotional stuff ready for that. My motivation and drive is on the photography and not my paid work. Good thing I work for myself and can control my hours (so to speak).

    You are finding the joy in having something exciting to move into in retirement and it gives a renewed enthusiasm for life generally. You will have great fun doing this.

    Steph and I are off to Ecuador, Galapagos and Cost Rica at the end of the month. My 60th birthday present to myself and Steph. I will have a whole month to get behind the camera although Steph and I have the discussion as to whether it is a photographic expedition or a holiday in which I am allowed to take photos. You can guess who wins.

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    Moderator Dave Humphries's Avatar
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    Re: My income tax return

    Quote Originally Posted by Peter Ryan View Post
    although Steph and I have the discussion as to whether it is a photographic expedition or a holiday in which I am allowed to take photos. You can guess who wins.
    Have a great holiday Peter

  17. #17
    Moderator Dave Humphries's Avatar
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    Re: My income tax return

    Quote Originally Posted by mythlady View Post
    ~ and I have actually started a business -- I opened a business savings and checking account yesterday, I'm getting a license, everything I need to get going, so i need the Quicken to keep track of how much money I'm losing (the IRS will allow me to lose money 3 out of 5 years). I have an office/studio space (not to photograph clients, but art-studio kind of space to store all my frames and equipment and mat cutter and so on). I'm on my way, people --
    Hi Elise,

    Very happy to hear things are taking off for you.

    I'm another one that might envy you, except, for the moment, I enjoy the day job, so I'll make the most of it while it lasts.

    Here's wishing you the best of luck with the new venture and of course; we'll always be here for you,

  18. #18
    mythlady's Avatar
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    Re: My income tax return

    Thanks, Dave -- I've been doing my day job for 30 years, so I'm about finished. I just can't get excited about it any more --

    Peter, have a wonderful trip! That's one I'd be interested in, too. Bring back some terrific photos --

  19. #19
    Klickit's Avatar
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    Re: My income tax return

    Peter, that sounds like the best birthday present ever - especially seeing you got to pick it for yourself. Like Elise, I'd love to see some of your images when you return.

  20. #20
    rpcrowe's Avatar
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    Re: My income tax return

    I always send back my income tax refund to the government with a nice note telling them how much I appreciate them being so frugal with my money!

    YEAH RIGHT!

    I am aiming at a Canon 7D in the foreseeable future but I will buy it with the proceeds of several lenses and other pieces of equipment I will be selling on the used market. My tax refund just goes into our bank account and is not really geared towards anything special.

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