Taxes, and all that other mess..

[Chris Saper]

Dear Mary,

I am going to print out Cynthia's response for myself (Cynthia, your tech-xpertise continues to astonish me!) because I am still doing the "receipts- in-a -box" April marathon.

Mary, you need to first be certain that you have state and any necessary local business licences in place. Tax laws are different in every jurisdiction, so you need to know what applies to you.

Portraiture is a relatively non-complex type of business to run as a one-person enterprise; however, with things like studio write-off, you really need to get an accountant's advice. Once you know how to calculate the studio square footage, and how to properly allocate overhead expenses, it is very simple to keep up. However, you do need to find out about the implications of depreciation recapture, and a few other tax-oriented issues so you understand what it ultimately means to you if you move. Your accountant will explain whether things are capital expenses, equipment or suppies. If you have someone who helps with your personal tax returns, that's a good place to start.

It is very important to keep accurate records, as it will enable you to track your expenses, and to see where there are opportunities to reduce them, without compromising your revenues. There is a great deal to be said for bulk purchases and standardized materials.

Good luck!
Chris