Tax Break for freelancers...

[blando3]

Does anybody know about a tax break for freelancers that is available on equipment purchases? A friend mentioned something about it and said I might find some info on here, but my searches are coming up empty. I'm located in California if that helps...
Thanks,
Andrew

[davide]

Was he talking about business expenses? I'm not sure of the details but I'm pretty sure you are allowed to write out qualified business expenses from your taxes. The best place to check this out would be with a good accountant or the IRS website.

[Jim Brennan]

Yes, check with an accountant. But if you are generating revenue from your services and equipment, then legitimate expenses like buying/renting gear and mileage can be tax deductible.

I think there was thread about this a month or so ago.

[ProfessorU]

If a portion of your home is used exclusively for buisiness work (like editing or meetings), you may be able to write that off as well.

[Cheesesailor77]

google: Section 6378 Exemption Certificate

fill it out at give hand it to the guy you're buying from (retail, not ebay, etc). You'll pay something like 3% tax instead of 8%, which is a big help on big purchases (like say, a RED ONE and tripod, F-ing A!). If it's a business that sells camera or production equipment, they should be familiar with this form.

[grinner]

There are no special breaks for freelancers. Same as all self-employed folks.
Write off what ya use for business.
That's your gear, your gas, certain clothing, half your meals, part of your casa, if working out of your house, part of your bills for the same reason, all of your cable/satellite bill, office supplies.... anything that has anything to do with work.
If I go out to eat, it's written off. I fill up at the gas station, written off. I take a buddy to the flop bar... on uncle sam.
You'll find our system is set up to discourage self employment to get ya on a regular income tax plan like the other drones. Pay quarterly so ya dont get swallowed up and have to go back to that. My first year in business for myself, I wasn't so detailed on my write offs and I had to take out a second mortgage for taxes that year. I'll be paying on that year for 25 years. Since then, I have paid much closer attention to reciepts. They are your buddy and can easily save you 40k a year or more.

[Doc Bernard]

google: Section 6378 Exemption Certificate

fill it out at give hand it to the guy you're buying from (retail, not ebay, etc). You'll pay something like 3% tax instead of 8%, which is a big help on big purchases (like say, a RED ONE and tripod, F-ing A!). If it's a business that sells camera or production equipment, they should be familiar with this form.

That is a California tax-break. I actually thought that was for LA county only but I could be wrong. As well as it being just for production houses. But there are ways around that.

But yeah, something good for living in CA. I have used it a couple of times. Sorry, Grinner. Here in Cali, we're special :)

[Jim Brennan]

There are no special breaks for freelancers. Same as all self-employed folks.
Write off what ya use for business.
That's your gear, your gas, certain clothing, half your meals, part of your casa, if working out of your house, part of your bills for the same reason, all of your cable/satellite bill, office supplies.... anything that has anything to do with work.
If I go out to eat, it's written off. I fill up at the gas station, written off. I take a buddy to the flop bar... on uncle sam.
You'll find our system is set up to discourage self employment to get ya on a regular income tax plan like the other drones. Pay quarterly so ya dont get swallowed up and have to go back to that. My first year in business for myself, I wasn't so detailed on my write offs and I had to take out a second mortgage for taxes that year. I'll be paying on that year for 25 years. Since then, I have paid much closer attention to reciepts. They are your buddy and can easily save you 40k a year or more.

Please consult an accountant. For example, if you take a mileage deduction, you can't take things like gas or oil changes (you can itemize your transportation costs, or take a flat mileage expense, but not both). If you write off a part of your home, it needs to be for the exclusive use of your business (in other words, not the laundry room). If you use a laptop for work, you can't legitimately write it off if you also use it to store family photos. There are many legitimate ways to deduct expenses from your taxes, but if you don't know what you are doing you can get in deep poo-poo if you get audited. "Entertainment " expenses can be a red flag for the IRS, and you can be forced to prove that it was business related. If you are just going out drinking, the little bit of money you may save by writing it off (You can only take a percentage) may not be worth the risk if you get audited, unless you are meeting for business purposes.

Next to finding an accountant, the two most important things you can do is keep a detailed calendar, and accurate records.

[Cheesesailor77]

That is a California tax-break. I actually thought that was for LA county only but I could be wrong. As well as it being just for production houses. But there are ways around that.

But yeah, something good for living in CA. I have used it a couple of times. Sorry, Grinner. Here in Cali, we're special :)

the OP was asking for a tax break in California and that's what I was trying to provide :) You don't need to be a production house. It's for anyone that works in production in some capacity, makes some using the purchased equipment, but no one bothers to check this. Just ask if they'll give you this break before you commit to a purchase. Most places will. I've used it a few times and no one has refused it.