The photography tax man cometh! Okay, there’s not really a photography tax…the same dude takes all our taxes. But the end is near! Well, you’re almost out of time to pay your taxes, anyway.
In a previous post, I touched on some tax considerations for photographers. Now I want to give you a working illustration and a quick and easy way to give Uncle Same his due.
As always, please remember I am not an accountant. I sought help from a certified public accountant and I suggest you do the same; especially if you’re just starting out.
So here’s my deal: I have enough coin to buy that shiny new 5D MKIII. Sweet, huh? Not so fast. I’ll have to work a little harder and wait a little longer. You see, I owe taxes on everything I’ve made this quarter. I add up all my profits, subtract my expenses and calculate 38.3% of that to come up with my estimated tax payment for the first quarter of 2012. Keep in mind that not all expenses can be taken at 100%. The IRS calculates depreciation for equipment. But that’s why it’s called an estimated payment. I may end up owing the government more money at the end of the year, or I might get money back. Read the previous post to find out why it’s 38.3% for me. Your mileage may vary.
Taxes are due April 15, June 15, September 15 and January 15. This year April 15 falls on a Sunday, so we get an extra day. The fastest way to pre-pay your estimated tax is to go to www.eftps.gov. Click the “enrollment” link and follow the registration instructions. Basically, you enter some personal info (social security, address, etc.) and link a bank account. You then request a PIN which comes to you in the mail within 7 days. Use that PIN to complete the registration and you’re all set.
Why pre-pay my taxes every quarter? ‘Cause I don’t want to get hit with a big tax bill at the end of the year. I would rather pay it in chunks throughout the year. I know it’s not fun, but I don’t imagine getting audited is fun either! And hey, maybe next quarter I’ll be able to deduct that 5D MKIII!