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Camera gear as a tax write-off?

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James WhittingtonCamera gear as a tax write-off?
by on Feb 14, 2012 at 9:37:47 pm


Here's my situation...I work for an advertising agency primarily as a video editor. However, I also shoot things for the agency on occasion. I really enjoy that side of things and want it to be a big part of my future both professionally and personally. So I've been trying convince the agency to invest in a nice DSLR package, but thus far to no avail.

It's gotten to the point where I'm considering purchasing the equipment myself. I REALLY want it! :) The gear I want would run in the $10,000-$12,0000 range. More than I should spend really. However, since I'd be using it for work at the agency (and hopefully some side gigs eventually) I'm pretty sure I would qualify to write it off my taxes.

This is something I'm not at all familiar with. Never written off business expenses before. What I'm curious about is what does this mean for me in the end? If I spend $10,000 on gear and write it all off, what is the bottom line impact? Hundreds back? Thousands? Don't know at all how it works and it could affect my decision on whether to get the gear or not.

Thanks very much!!!

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Steve BoultbeeRe: Camera gear as a tax write-off?
by on Feb 14, 2012 at 10:43:18 pm

You should be able to write off the business use portion of the purchase price through depreciation (and related provisions).

Where this is reported will determine the tax savings. Are you a W-2 employee with the advertising agency or are you an independent contractor?

If you use the camera for the advertising agency (and are a W-2 employee) and you do not receive any sort of reimbursement for the use of the camera, then the depreciation on the camera gets taken as a miscellaneous itemized deduction for unreimubursed employee business expenses. This, along with any other miscellaneous itemized deductions, is only deductible to the extent that, in aggregate, they exceed 2% of of your adjusted gross income (AGI).

If you are paid as an independent contractor and file a Schedule C, then you'd get a better answer as the depreciation won't get the 2% of AGI haircut. If you're doing paid gigs on the side, you'd also be filing a Schedule C and the related depreciation is deductible against that income.

The depreciation can be accelerated by utilizing the Section 179 expense deduction which would allow for full write off in the first year. However, if the business use of the asset ever falls below 50%, then the Sec. 179 deduction must be recaptured (i.e. you pick it up as income).

You can also depreciate the asset over time (likely 5 years), but cameras are arguably what we call "listed property" and are subject to limits on the amount of depreciation allowed per year as well as a business use test similar to the Sec. 179 deduction.

While these are general rules, your specific sitution may result in different treatment.

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James WhittingtonRe: Camera gear as a tax write-off?
by on Feb 14, 2012 at 11:00:05 pm

Thanks for all that info Steve!

I am a W2 employee for the agency. That's all a bit of a foreign language to me, so sounds like I should sit down with a CPA and go over it in detail. Not quite as simple as "I bought this stuff for work, now give me some money back!". :)

Hopefully I can just talk the agency into getting the gear and not go through this mess to begin with!

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Al BergsteinRe: Camera gear as a tax write-off?
by on Feb 15, 2012 at 7:05:35 am

Yep, talk to your accountant. You might best set up a sole proprietorship. Could be other benefits. I.e. rent the camera's back, etc.


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Michael GriggsRe: Camera gear as a tax write-off?
by on Feb 15, 2012 at 2:38:48 pm

However you end up reporting it, it is important to realize that any tax "write off" does not in and of itself give you "money back". It simply lowers the base amount that the government will be charging you taxes on.

e.g. say you made $50k gross for the year. But you spent $10k to make that $50k. You only pay taxes on $40k. The $10k (expenses) that you spent is "written off". (This is a very rough-and-dirty example, but hopefully it helps makes sense.)

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Nick GriffinRe: Camera gear as a tax write-off?
by on Feb 15, 2012 at 9:08:57 pm

I think it would also be a good idea for James to set up a separate company as the entity which RENTS the camera to his employer, at or slightly below market rates, each time it's used. I strongly recommend against making your ownership of gear one of the things you bring to the job at no additional cost. But then I'm not an accountant and I suspect that Mr. Boultbee might be.

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James WhittingtonRe: Camera gear as a tax write-off?
by on Feb 15, 2012 at 10:15:06 pm

Thanks very much for all the feedback guys!!!

Good idea Nick. I was actually thinking about doing just that. If I invested in all that gear, there is no reason NOT to invoice my agency a rental fee each time we use it. Looking at current rates, it would come to at least $300 day. Not a bad way to recoup some of the costs.

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Steve BoultbeeRe: Camera gear as a tax write-off?
by on Feb 15, 2012 at 11:16:48 pm

If you wish to rent it to your company (or others) for a fee, then I agree that Nick's suggestion to run it as a rental activity in a separate entity is a great one.

That way, your ability use the depreciation on the camera equipment and accessories won't be limited by your income as it would be if you're just deducting it as an unreimbursed employee expense.

A single-member LLC would likely be the easiest to do. The tax filings are simple as a single-member LLC is disregarded for tax purposes and its income and deductions are reported on your personal return as if the LLC didn't exist. There may be some minimal state filings but a full-blown separate return for the LLC won't be required - at least this is the case in California where I am.

Of course, if you do have a separate entity you need to keep a separate bank account and all invoices or purchases should be in the name of the entity. Keeping good books & records is also a must.

As Nick deduced, yes, I am a CPA. I'm making general comments based on what was provided, but make sure to run all ideas by your CPA and/or attorney so that they can give you detailed advice based on the facts of your situation.

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Rich RubaschRe: Camera gear as a tax write-off?
by on Feb 16, 2012 at 3:41:07 am

$10k seems pretty high for a starter DSLR kit. And for the agency work that workflow might not be the best entry level solution. A simpler all in one camera package would allow for quicker setup and possibly better audio workflow(DSLR's require an outboard audio recorder that requires syncing).

A T2i or even a 7D with a camera mounted LED, a shotgun mic that goes right into the camera and a decent tripod is about $3500. A couple FloLight LED panels and you are right around half of what you budgeted for.

$10k seems like a lot for an "experiment" regardless of what the write off might be.

Rich Rubasch
Tilt Media Inc.
Video Production, Post, Studio Sound Stage

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James WhittingtonRe: Camera gear as a tax write-off?
by on Feb 16, 2012 at 5:26:28 pm

You definitely bring up some good points Rich!

When it comes to shooting I get kind of picky and really love the aesthetic a full frame DSLR offers. Plus, I want to be able to do professional level photography and am really into timelapse photography as well. So...I really would like the 5D Mark II (or maybe even the Mark III which is rumored to be announced soon!). Toss in 3-4 Canon L-series or Zeiss lenses and you can get to $10,000 pretty quick!

I know you can get something like a 7D or T2i with a few generic lenses for substantially less and certainly do good work. However, I feel like if I want to shoot for the agency as well as do some freelance work on the side the extra money now might be worth it.

Thanks for your input!

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Tim WilsonRe: Camera gear as a tax write-off?
by on Feb 17, 2012 at 8:14:23 am

[James Whittington] "...really love the aesthetic a full frame DSLR offers..."

There's a whole class of full-frame camcorders now that offer many, many advantages over DSLRs. Panasonic AF100, JVC HM100U, Sony F3 and FS100...there are a bunch of others. The ones I mentioned are in the $2000 to $20,000 range (oops - on your budget you might want to skip the F3), and all will make you much happier than a DSLR for a lot of reasons.

Of course, if what you want is a DSLR, that's one thing. But if you're looking for video on a 35mm chip, look at a video camera first. This class of camera is exploding. I think you'll be pleasantly surprised.

And to go off in a different direction, there are a number of really nice HD cameras that allow interchangeable lenses. You can get one of those and some cine lenses and be blown away in your price range.

And to get REALLY radical, you'd be amazed at how affordably you can rent something like a Sony EX-3 and lenses, even an F3. Rent one, shoot something beautiful, and THEN make your case to the boss.


Tim Wilson
Associate Publisher, Editor-in-Chief
Creative COW Magazine

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