Can I write off photography equipment as Sole Proprietorship expenses for this year?

I've been doing some photography gigs on the side this year - nothing major, maybe around $800 total. I've been making invoices for each job, but it's all been cash payments (no formal business setup). Here's my question - I purchased some pretty expensive camera equipment this year (a couple new lenses and a professional tripod) that I've been using for these paid gigs. Can I retroactively set up a sole proprietorship now and write these off as business expenses for this year's taxes? Or do I need to establish the sole proprietorship first and can only write off expenses that come after that? I'm really confused about how this works and when I need to officially "become" a business. I don't know much about taxes or business regulations, but I'd like to get some benefit from these expensive purchases if possible since they were specifically for these paying gigs.

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20 comments

Maria Gonzalez

•8M

You don't need to "set up" a sole proprietorship - you already are one! If you're doing photography work and getting paid, you're automatically operating as a sole proprietorship in the eyes of the IRS, even without formal registration. The good news is you can absolutely deduct those equipment purchases on your taxes this year since you're using them for your photography business. You'll need to report your income and expenses on Schedule C when filing your taxes. Make sure you keep all receipts for the equipment and a record of your income (those invoices you mentioned will be helpful). Since your income is under $1,000, you'll still show it all on your tax return, but the equipment deductions will likely mean you won't owe much, if any, self-employment tax on this income.

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Maria Gonzalez

•8M

Yes, you're already a sole proprietorship for tax purposes! The IRS considers you a business once you start making money with the intention of making a profit, regardless of paperwork filed. Local business licenses are a separate issue - those requirements vary by city/county. Some areas require licenses even for small side businesses, while others have exemptions below certain income thresholds. Check with your local government to see what's required, but that doesn't affect your federal tax status as a sole proprietorship.

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Santiago Martinez

•8M

I was in a similar situation with my side hustle last year. What really helped me was using taxr.ai (https://taxr.ai) to figure out what I could write off. I uploaded photos of my receipts and invoices, and it identified all the deductions I was eligible for as a photographer. The tool even explained why certain expenses qualified as business deductions, which helped me understand the rules better. What I found most helpful was how it categorized everything automatically - it knew which equipment was fully deductible vs. what needed to be depreciated. Saved me hours of research and probably got me more deductions than I would have found on my own.

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Santiago Martinez

•8M

It's surprisingly accurate - it's built specifically for tax rules and follows IRS guidelines. For my photography business, it correctly identified which equipment could be fully expensed using Section 179 and which needed depreciation. It even caught some home office deductions I didn't know I qualified for. Yes, it handles state-specific rules too! I'm actually in New York, and it flagged some deductions that were different from federal guidelines. For California, it should definitely recognize those state-specific rules - that's actually one of the strengths of the system.

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Hannah White

•8M

Speaking from experience, dealing with the IRS can be a nightmare if you have questions about sole proprietorship deductions. After waiting on hold for HOURS trying to get someone to answer questions about my photography business deductions, I found Claimyr (https://claimyr.com). You can see how it works here: https://youtu.be/_kiP6q8DX5c They got me connected to an actual IRS agent in under 15 minutes when I needed clarification about deducting camera equipment. The agent explained exactly what documentation I needed to keep for my photography business expenses. Totally changed how I view dealing with the IRS.

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Hannah White

•8M

It uses a system that navigates the IRS phone tree and holds your place in line. When an agent actually picks up, it calls you so you can take the call. You don't have to sit there listening to hold music for hours - you just get a call when an agent is actually available. There's no special "cutting in line" happening - it's just handling the hold time so you don't have to. I was skeptical too, but when my call got connected to an actual IRS agent who answered my questions about equipment deductions, I was sold. No catch other than it saves you from the mind-numbing hold music and "your call is important to us" messages on repeat.

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Mateo Silva

•8M

Alright I need to apologize for my skeptical comment above. I finally broke down and tried Claimyr after spending 3 hours on hold with the IRS yesterday and getting disconnected. Used the service this morning and no joke, I was talking to an actual IRS agent within 20 minutes. The agent walked me through exactly how to categorize my business equipment purchases and how to handle depreciation vs. direct expenses. Wish I had known about this months ago when I was trying to figure out my quarterly payments.

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Victoria Jones

•8M

The 3-out-of-5 years rule is more of a safe harbor than an immediate requirement. For new businesses, the IRS looks at your intent to make a profit, not just your profit history. You can absolutely take deductions in your first year. Just make sure you're operating like a business - keep records, track expenses, have a separate business bank account if possible, and show that you're trying to make money. Document your marketing efforts, client communications, and business planning. The IRS wants to see that you're serious about making this a profitable venture, not just trying to write off a hobby.

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Ethan Clark

•5M

One thing to keep in mind is that since you're dealing with expensive camera equipment, you might want to look into Section 179 deduction vs. depreciation. For 2024, you can deduct up to $1,220,000 worth of qualifying business equipment in the year you purchase it instead of depreciating it over several years. This could be really beneficial for your lenses and tripod since they're probably under that threshold. Also, make sure you can prove the business use percentage if you ever use that equipment for personal photography too. The IRS will want to see that you're only deducting the portion actually used for your paid gigs. Keep a log of when you use the equipment for business vs. personal use - it'll save you headaches if you ever get audited. Your $800 in income definitely qualifies this as a business activity, so you're good there. Just make sure to report everything properly on Schedule C.

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