Freelance vs. Professional?

raptorcaptor

johng wrote: »

I can say the IRS laws must have changed since Art's audit. If, for example, you made $700 last year selling photos off smugmug - you bet the IRS requires you to declare it and pay taxes on it. Of course, they also allow you to deduct your camera equipment as well . The only question there is what time frame you depreciate that equipment over. But make no mistake, you don't need to make 50% of your income from photography for the IRS to force you to pay taxes on it.

Here is the IRS's guide to whether you are a pro or hobbist.

http://www.irs.gov/newsroom/article/0,,id=169490,00.html

Pupator

Thanks Glenn!

Here are the key points:

Generally, an activity qualifies as a business if it is carried on with the reasonable expectation of earning a profit.

The IRS presumes that an activity is carried on for profit if it makes a profit during at least three of the last five tax years, including the current year — at least two of the last seven years for activities that consist primarily of breeding, showing, training or racing horses.