As reported by multiple financial blogs this week, the tax deductions that allow photographers to write off equipment purchases (such as cameras, lenses, lighting, etc) to reduce their taxable income is being greatly reduced next year. That makes the remaining days (prior to Dec 31, 2013) a much better time to invest in equipment than waiting until next year.
We couldn’t agree more with the blogs that this alone should not be a reason to purchase equipment. However, if an equipment purchase is on the horizon for you then it may save you considerable tax dollars if you can complete the purchase before Dec 31 of this year.
Changes in the tax law shouldn’t be the biggest reason for buying new equipment. Deductions aren’t worth it if you’re wasting your money on something your business doesn’t really need. But if you’ve been debating whether to buy tablet computers for your employees or install new manufacturing equipment in 2013 or in 2014, it might make sense to move the purchase into this year. If you can get a better price now than you would next year, that’s another reason to buy now.
In addition, depending on the type of lease and the particulars of the relevant tax codes, you may be able to write off the entirety of a large purchase (e.g. that medium format digital back you’ve been dreaming of) in this tax year even if you use a lease to pay off the purchase over a few years.
Of course we are not tax experts, so you should consult with your tax advisor. We work with photographers every year to coordinate between accountants, tax advisors, manufacturers, and leasing companies to determine the best way to save them money.
Read More
Direct Capital’s PointBlank Blog
IRS Website