Any tax incentives for *Low Budget* filmmaking??

S

sb2012

Member
Sorry, couldn't find the appropriate board for this, so I figured I'd post it here. I live in New York City. Now I know there's excellent tax incentives here for higher budgeted films (no lower than $15 million), but let's say it's guys like us who made something for under $10,000 or such?

If the answer is no, then what exactly do we do with our filmmaking expenses when tax season comes around? File a schedule C or something? Or do we do nothing at all with them?

I just filmed a 15 min short, my first one ever, shot over a two day period. And here's my expenses:
Lighting rental - $87
Actress Pay - $100
Camera/Sound Guy Pay - $150
Food/Drinks - $30
Make-up - $9
Other equipment (i.e. lightbulbs, batteries, DV tapes, etc.) - $46
Props/Set dressing - $16
Gas for car - $62

TOTAL - $500

I have receipts for everything EXCEPT for the gas money and the amounts I paid to the actress and the camera/sound guy.
 
As far as taxes go I would think it would depend on if you made money on the movie or if you operate as a business or if you are self employed with video work. If you are just doing it for fun I'm not sure how you could write that off.
 
I suggest Schedule C - I use it and deduct ALL of my production expenses - including research and development. I have a CPA do my taxes so I have someone to do it properly and help to make sure I don't claim something I shouldn't. But Hectorxd is exactly correct - if you don't make a profit within a certain number of years, the feds consider it a hobby and not a business - and, consequently, don't allow any write-offs.
 
Hectorxd said:
As far as taxes go I would think it would depend on if you made money on the movie or if you operate as a business or if you are self employed with video work. If you are just doing it for fun I'm not sure how you could write that off.
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Well, I'm one of the little guys trying to get in the business, I'm not with a production company or anything, just a simple guy who works a regular job and trying to get into filmmaking. I'm certainly not doing it for fun or as a hobby, the first intent for this project is to show it to film festivals and I would say money comes as a close second.
 
cyclone said:
I suggest Schedule C - I use it and deduct ALL of my production expenses - including research and development. I have a CPA do my taxes so I have someone to do it properly and help to make sure I don't claim something I shouldn't. But Hectorxd is exactly correct - if you don't make a profit within a certain number of years, the feds consider it a hobby and not a business - and, consequently, don't allow any write-offs.
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Cyclone,

So... perhaps my best bet is to not deduct those expenses until I make a profit? Like, if 2013 comes around and still no profit, then I don't do it and just wait til' the next year? I don't wanna take any risks when it comes to taxes and the government, lol.
 
I think the determining factor as to deductions is not making a profit, but actually trying to make a profit. Most small business do not make a profit right off the bat.
 
Not sure about america but here in australia you can write off losses from up to five years but only against the profits of the registered business (your production company), not against your primary income (day job). An accountant is your best bet to find out any options you have, if you can afford to make films you can afford a consultation fee. They may know of a scheme you never would have thought of and you can be reasonably confident that it will be legal. You will at least know exactly where you stand. If you have a wealthy family member there may be a negative gearing opportunity for them to invest in your business. Incentives for low budget movies are more likely to be found in the form of grants and competition prizes.
 
Actually, my opinion is, don't deduct it yet if you don't have a film making business - and then if you make money in the next 2-3 years, establish a business (with a DBA, if necessary) and then file an amended return. (Full disclosure: I know absolutely nothing about tax procedures...except that I know that you are able to file amended and/or revised returns.)
 
Hate that about many of the tax incentives. Even some states with a half-million minimum is just too much for us little guys. Thankfully there's New Mexico.
 
sb2012 said:
Well, I'm one of the little guys trying to get in the business, I'm not with a production company or anything, just a simple guy who works a regular job and trying to get into filmmaking. I'm certainly not doing it for fun or as a hobby, the first intent for this project is to show it to film festivals and I would say money comes as a close second.
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Where is the money coming from? I'm not sure how you are going to make money off of a 15 minute short unless you use it to get more work. Do you have a plan set in place as far as making a feature and getting distribution or are you trying to be a director? Go ahead and keep track for your records and file a schedule C next year if you end up making money on it. The IRS calls it a hobby if you make less than $400 the last time I checked.
 
Hectorxd said:
Where is the money coming from? I'm not sure how you are going to make money off of a 15 minute short unless you use it to get more work. Do you have a plan set in place as far as making a feature and getting distribution or are you trying to be a director? Go ahead and keep track for your records and file a schedule C next year if you end up making money on it. The IRS calls it a hobby if you make less than $400 the last time I checked.
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They do? Wow, that sucks.

The money is coming from my bank account. Well yes, the idea is to show it around, show people what I'm capable of and possibly get more work. That's my main intention. However, yes, I'm trying to be a director.
 
Another thing that worked for me was I put some of my footage into stock footage houses. Granted, the shots didn't make much money, but the key was that the footage generated some (albeit, very minimum) income. That helped show I was a 'business' and I started filing a Schedule C.
 
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