Snap snap. It’s your job to take the best photo of people, places and events. After all, it’s how you earn an income. Running a business, even if it’s a side-hustle on the weekend to earn some extra cash takes time, money, blood, sweat and tears. The last thing you want or need is to pay too much tax on top of all that, so if you’re a photographer, let’s see what you can claim as tax deductions and lower your overall tax bill. After all, why pay more than you have to.
To work as a photographer, you need a lot of equipment. Whether on location or in the studio, you’ll need your gear to do your job. Many of the purchases are a significant cost and the list is never-ending. You’ll need cameras to lenses, tripods, lighting, laptops, mobile phones and editing software to name a few, but the good news is many of these purchases are tax deductible.
Pro Tax Tip: It’s important to remember that purchases over $300 as an employee don’t have an immediate deduction. They will have to be depreciated over a number of years. Purchase under $300 will be eligible for an immediate deduction in the year in which it was purchased.
If you use any of your equipment privately, you’ll need to apportion the work-related percentage and private use. You can only claim the work-related use.
If you are working as a sole trader then different rules apply and the $300 threshold does not apply. Up to 30 June 2023 you may be able to claim all purchases immediately under temporary expensing. You can instead choose to depreciate equipment that costs more than $100 over a number of years in order the manage your tax liabilities over a number of years.
It pays to advertise your business. After all, a Google search or scrolling through social media platforms is how customers find out about you. Every dollar you spend on advertising, be it online or print, is a tax deduction. These expenses include advertising dollars as well as stock photos and graphic design fees.
Need to leave your business card, a price list, or a pamphlet or two with a client? Printed materials advertising your business is also tax deductible.
Pro Tax Tip: The cost of web hosting, domain fees and hosting email lists is a relevant tax deduction.
You invite customers into your premises for a photo-shoot, as well as travel on location. It’s a good idea to purchase insurance that covers you for public liability events as well as protecting your gear against loss, damage or theft. Business insurance is a claimable tax deduction.
Pro Tax Tip: Medical insurance is not a tax deduction, but if you earn over $90,000 for singles or $180,000 for couples you’ll be obligated to pay the Medicare Levy Surcharge at a rate of 1%, 1.25% or 1.5% based on your total amount of income if you don’t have private health insurance and exceed the above thresholds.
Some photographers opt to operate their business in a studio. Those who offer glamour shots or professional portraits often need props and lighting to make their photography work.
Rental studio space may be an option for those who don’t need a full time studio. Others may operate their business from a dedicated room in their home.
Property, rental and working from home expenses can be claimed as a tax deduction, as can the running costs of your business. These items include heating, cooling, phone, internet, gas, cleaning and repairing equipment and the decline of office furniture such as desks and desk chairs.
Sometimes you’ll need extra help on the day. Often you’ll call in help on a casual basis, paying freelancers of casual people for their help. When you hire someone to help you, the cost of hire is tax deductible as long as the person is not categorised as your staff member.
You can also claim the cost of editors, designers, accounting assistance and the cost of managing your tax affairs. In fact, any professional fees you pay for outsourcing your work can be claimed.
Working as a photographer means you might need to travel for your work or to a job for a client. There are also interviews you need to get to talk to clients, and meetings to be attended that do not operate from an office.
Travel and car expenses can be claimed as tax deductions. These expenses include petrol, road tolls, parking, fares, public transport. If you need to stay away from home overnight, you’ll be able to claim accommodation fees and meals.
Pro Tax Tip: To claim car expenses, you’ll need to keep a current log book. You can claim using the cents per kilometre method or the actual cost method. For a full explanation on how to claim your car expenses, read: Car Expenses – What You Should Know To Reduce Your Tax
Work clothing that is easily identified as working for your business can be claimed. Your business logo should be clearly identifiable on any clothing you claim. If you need to wear protective gear, such as a high-vis vest or steel-capped boots, you can claim these items as a tax deduction.
Pro Tax Tip: Clothing which can be worn casually when you’re not working, such as pants, jeans, sneakers, caps cannot be claimed. They are deemed to be private even if you do wear them to work.
You might need to update your skills or learn a new software program. Some businesses might require a first aid certificate or and OH&S accreditation. You might also be interested in going to work-related seminars featuring writing, editing or specialist photography skills.
You’ll be happy to know that the cost of the course or licensing as well as travel costs to and from the event or school is claimable if you are already receiving income from that venture. Books, stationery, computers as well as phone and internet costs are also eligible tax deductions.
Pro Tax Tip: HECS/HELP repayments cannot be claimed.
How To Claim
The Australian Taxation Office (ATO) has stringent requirements when claiming tax deductions.
- You must already be out of pocket to claim
- You can only claim the work-related portion of your expenses
- You must be able to prove the expense
So, how do you prove your expense? The ATO requires receipts that have the date, name of the supplier, their ABN number, what the purchase was and the amount. It’s not only receipts they require.
To claim travel expenses, you’ll need a travel diary which details the date, whereabouts, details and reason for your travel. To claim car expenses, you’ll need a current logbook. To claim working from home expenses, you’ll need a work diary which details the date, hours worked and general tasks performed.
Other proof you might need includes tax invoices, communication from financial institutions or rental agreements.
It’s best to be prepared but if you have any questions, reach out to a professional who can guide you through exactly what you need to do to be compliant. After all, an audit from the ATO is best avoided. ITP Accounting Professionals have helped Australian individuals lodge their tax returns for over 50 years. There’s not a lot they don’t know about tax. They have the experience to claim every single deduction you’re eligible for to lower your tax. Phone 1800 367 476 and chat with a friendly professional today.