Just about all of the people who rack up frequent flyer miles fall into two categories. Either their jobs require lots of travel or they are vacationers.
But an ever-growing number of them are "commuter couples" who live apart in an effort to keep their jobs or advance their careers. By one estimate, more than 1 million wives work and maintain homes in one city, while their husbands do likewise in another city. With more women launching careers and advancing into positions of greater responsibility, the number is likely to keep increasing, notwithstanding the delays caused by heightened security measures imposed after the terrorist attacks on Sep.11.
Understandably, the minuses outweigh the pluses for dual-career couples who live apart for the sake of their jobs. Yes, those who have honed their time-management skills find it easier nowadays than previously to make the commuting workable, with careers becoming more mobile and workweeks more flexible. In fact, these being the harried times they are, a good many working partners in long-distance marriages now spend as much time together as their stay-at-home counterparts.
Nevertheless, few couples favor living apart. Add up the inconvenience, expense, strains to career and family, and the arrangement seems to defeat the reason for getting hitched. And if all the social and emotional troubles associated with separations from loved ones were not enough, throw in some troublesome tax issues for commuter couples, particularly the way the Internal Revenue Service defines the location of their "tax home" and how that usually derails deductibility of travel expenses.
The IRS unreservedly blesses business-expense deductions of 100 percent for lodgings and 50 percent for meals when travelers are on a trip that takes them "away from home" overnight. But buried in the fine print is the IRS definition of "home": It is where a person's principal place of business or employment is located, even though his or her family or spouse resides elsewhere.
This should raise no problems for most people; they work at one job in the same place in which they live with their families. But couples who live apart have to grapple with a complicated issue: how do they identify their tax home and determine whether their outlays for meals and lodgings qualify as away-from-home travel expenses?
To illustrate the tax problem, consider the case of Robert and Margaret Coerver. Each had separate jobs and residences, his in Wilmington, Delaware, and hers in New York City. During the first two years of their marriage, she kept her job and apartment in New York and made frequent trips to Wilmington. Margaret contended she was entitled to deduct her rent and food while in New York, as well as her New York-Wilmington travel, because she and Robert filed jointly and their tax home was in Wilmington, where he lived.
But the United States Court of Appeals for the Third Circuit backed the Tax Court, which barred any write-off for these expenses. Because her stay in New York was "indefinite," the appeals court ruled, her tax home did not shift from New York to Wilmington, even though she and her Delaware-based husband filed jointly. In the court's eyes, Margaret was never "away from home" while in New York, so her rent and food there remained nondeductible. Nor could she deduct New York-Wilmington travel, since those trips also were for personal reasons.
Julian Block, a former IRS agent and a tax attorney, is the author of "The Stock Photographer's Tax Guide." For details on how to purchase this important 32-page publication: http://www.photosource.com/taxtips.php . For Julian's tax saving and tax planning reports, go to http://www.photosource.com/products and click on "2004 Tax Tip Guides." Julian can be reached at julianblock@yahoo.com .
Welcome
to Hard-To-Find-Photos.com. Here's where you'll
find information about income tax for stock photographers,
self-employed tax how-to, tax record keeping, and IRA planning.
IRS Changes Mileage-Deduction Rates
Stock photographers who use their cars for business travel can deduct actual expenses, a category that includes gas, repairs, license tags, registration fees, and depreciation. Or they have the option to claim a standard mileage rate that is adjusted each year to reflect inflation. The optional standard rate's advantage is that it eliminates the extra burden of tracking actual costs; records need to be kept only of business miles driven for the year in question.
While gas is a major factor in the optional figure, the IRS also considers other items, such as insurance and the price of new vehicles. Just to be clear, the IRS defines "cars" to include vans, pickups or panel trucks.
For 2006, the standard rate is 44.5 cents per mile. For 2005, it is 48.5 cents per mile for the final four months and 40.5 cents per mile for the first eight months. The special increase to 48.5 from 40.5 reflected the surge in gasoline prices caused by Hurricane Katrina.
The standard mileage rate is a benchmark used by the federal and state governments and many employers to reimburse employees for their mileage. Employees can deduct actual expenses that exceed reimbursements.
People who need medical care and drive to and from doctors, clinics, hospitals and the like are able to deduct actual costs of gas and oil or a standard rate. It is 18 cents per mile for 2006, 22 cents a mile for the final four months of 2005 and 15 cents a mile for the first eight months of 2005.
Individuals who move for job-related reasons and use their cars to transport themselves, members of their households or their belongings can deduct actual costs of gas and oil or a standard mileage rate that is the same as the one for medical driving - 18, 22 and 15 cents for 2006, the final four months of 2005, and the first eight months of 2005, respectively.
Persons who use their cars to perform services for such charitable organizations as schools and religious institutions can deduct actual costs of gas and oil or a standard mileage rate. It is 14 cents for 2006 and 2005, a rate fixed by law.
There is an exception for charity work related to Hurricane Katrina. The standard rate for deduction purposes is 32 cents for 2006, 34 cents for the final four months of 2005 and 29 cents for August 25 through August 31 of 2005. The standard rate for reimbursement purposes is 44.5 cents for 2006, 48.5 cents for the final four months of 2005 and 40.5 cents for August 25 through August 31 of 2005.
Besides claiming mileage allowances, remember to take separate deductions for parking fees, as well as bridge, tunnel and turnpike tolls. And drive within speed limits. The tax collectors refuse to go along with deductions for traffic tickets even if, say, you were on the way to teach Sunday school or racing the stork to the hospital.
If the IRS audits your return and questions car expenses, it will not challenge standard-rate deductions, provided you are able to substantiate the miles driven; actual expenses are disregarded. So it is advisable to keep a glove-compartment diary or other record in which you list the details of when, how far and why you went, along with the cost of parking and tolls.
Julian Block, attorney and syndicated columnist, teaches a continuing ed course called "Tax Tips For Freelance Writers, Photographers And Artists." The New School in New York City and several colleges in neighboring Westchester County will offer the one-session course in April and May. For more information, contact Julian at julianblock@yahoo.com.
Business
Notepad
Flashback
1931 - October 7 - An infrared photograph (of a large group of people) taken in the dark with a short exposure was made in the Eastman Kodak Research Laboratories in Rochester, NY. ... Full
Story
Program maintains it's easy to earn extra
funds by establishing a photo business out of your home and
photographing local businesses, corporations, churches, schools,
sports teams, and families in your community.
Are Meetings Deductible?
In these increasingly tough times, it is more important than ever for freelance photographers to familiarize themselves with the steps they can take to keep their taxes to the legal minimum -- and, of course, keep themselves out of trouble. To help you take year-round advantage of legitimate breaks while not running afoul of the rules, here is some expert advice on common tax problems. If you need additional information or guidance in specific areas, contact the Internal Revenue Service, or consult your personal tax advisor.
Question: I went to a get-together with some of my fellow photographers. There wasn't a speaker; it was more of a social event. But I see it as networking with my professional colleagues, and most of the talk was about work-related issues. Can I take a business-expense deduction for the cost of getting there? How about my cash contribution to the refreshments for the group?
Answer: The event qualifies for a deduction. You are entitled to claim the entire cost of round-trip travel between your home and the party's site. For travel by bus, train, or taxi, just keep track of your fares and claim them as business expenses; for auto travel, you can claim actual expenses or the standard mileage allowance. Whether you claim actual expenses or use the mileage allowance, remember to deduct parking fees and bridge, tunnel and turnpike tolls that you pay while you are on business, too.
As for refreshment outlays, they fall into the category of meals and entertainment, are subject to a cap, and are only 50% deductible.
Julian Block, a former IRS agent and a tax attorney, is the author of "The Stock Photographer's Tax Guide." For details on how to purchase this important 32-page publication: http://www.photosource.com/taxtips.php
"We have established a small stock photo agency and hope to make it profitable. We need advice on financial planning, particularly income taxes," the client asked.
My first response is always to refer them to the free assistance immediately available from the Internal Revenue Service.
The agency provides a wide-ranging series of publications to help individuals with their tax planning throughout the year.
YOUR TAX DOLLARS PAID FOR THEM ALREADY
The publication for self-employment income is Tax Guide for Small Business, Publication 334. The IRS says this annually-updated guide identifies the kind of income they must report and the different deductions they can take.
Readers also ought to get a copy of IRS Publication 910, Guide to Free Tax Services. It provides a complete list of the agency's booklets and explains what each one covers. The topics include deductions for home offices and IRAs (Publications 587 and 590, respectively).
As the title of Publication 910 makes clear, the feds do not require you to shell out for most of their publications; your tax dollars paid for them already.
EXERCISE YOUR OPTIONS
The IRS provides several easy ways for you to obtain publications and forms for this year (or for past years, as might prove necessary). Dial toll-free (800) TAX-FORM [829-3676]. Or you can order them by mail, using the instruction booklet that accompanies your 1040 form. Allow at least 10 working days for delivery of publications and forms ordered by phone or letter.
For fax: (703) 368-9694. Follow the voice prompts and key in your response. You may select up to three items to order during a single call. Generally, service is available at all times.
Computer: http://www.irs.gov., where you can download and print any of 700 federal tax forms with instructions, approximately 100 tax publications, and other tax materials.
The IRS office serving your area and pick up the publications. To be on the safe side, phone first and find out whether that office stocks what you need. Many libraries also have copies of IRS tax guides.
Reminder: More than one taxpayer has learned the expensive way not to rely absolutely on IRS advice, whether it is information that employees give to telephone or walk-in inquiries or instructions that the agency prints in its publications. The IRS is not bound by mistakes in their instructions or advice.
Julian Block, a former IRS agent and tax attorney, is the author of "Julian Block's Tax Avoidance Secrets" ($29.95 p&h included, 560 pgs. Mention you are a PhotoStockNotes subscriber and receive the book for $19.95. Julian Block, 3 Washington Sq, Larchmont NY 10538-2032). For Julian's tax saving and tax planning reports, go to http://www.photosourcefolio.com /TaxReports.htm . Julian can be reached at julianblock@yahoo.com.
Of
Interest
ANOTHER RIGHTS GRAB ?
-- Blackpool photography 'rights grab' furore (UK). A council has hit back at criticism over potential exploitation of photo competition entries, saying that use of amateur pictures is becoming 'commonplace' on TV and in other media.
Though rules for Blackpool Council's 'Love Blackpool' competition state that copyright remains with the entrant, they also grant the council 'a perpetual, royalty free, non-exclusive, sub-licensable right and licence to use, exhibit, reproduce, modify, adapt, publish, distribute... make available to the public and exercise all copyright and publicity rights...'
Among those livid at the rules is local resident Myk Ripley, one of Amateur Photographer's (AP) website forum moderators.
http://www.amateurphotographer.co.uk/news/
Blackpool_photography_rights_grab_furore_
news_269875.html ... Full
Story
COST OF TRAVEL OVERSEAS is always prohibitive for the stock photographer
just starting out. One way to skirt around this problem is to become a
Travel Agent.
NO MORE STATIC TRAVEL SHOTS? -- iTravelstock Launches - The iTravelstock collection addresses a growing trend of requests for "active travel" imagery, focusing on the features and characteristics of a location, but also including enthusiast activities that make the location a destination.
http://www.creativepro.com/article/itravelstock-launches
BETTER VIDEOS COMING Canon, Nikon video-shooting SLR cameras ready for action
Two new SLRs can now shoot high-definition video, taking advantage of
the superior lenses (much better than video cameras,
way better than point-and-shoots) available for SLRs.
http://www.usatoday.com/tech/products/2008-10-01-slr-video_N.htm?csp=34
GOOD SAMARATIN -- One Photo Editor - Doing Good by Doing Right - Photo editors often get a bad rap. They're often (incorrectly) blamed for the bad contracts they are required to foist upon us. Thus, when a photo editor does the right thing, as is the case here, we feel it of value to let people know.
http://photobusinessforum.blogspot.com/2008/11/one-photo-editor-doing-good-by-doing.html
INTERSECTION OF POLITICS AND PHOTOGRAPHY The Election And Photography - The Obama camp did a much better job managing their photography in this election. When I saw the Obama rally photos (here) I thought, how can you not believe in the power of photography to deliver a message?
http://www.aphotoeditor.com/2008/11/04/the-election-and-photography/
NO LONGER OF PAGE 2 INTEREST. -- Is Microstock Becoming More Accepted in the Stock Photo Industry? - This video shows some short interviews filmed recently with Andres Rodriguez, Steve Kapsinow of StockXpert, Serban Enache, Yuri Arcurs, and Steve Pigeon of Masterfile. In some of the interviews the topic of “microstock” came up; in others it arose naturally.
http://www.microstockdiaries.com/is-microstock-becoming-more-accepted-in-the-stock-photo-industry.html
HOW DO THEY DO IT? Yuri Arcurs - Microstock Entrepreneur - Not content with an
annual microstock income of US$1.3 million and being the top selling microstock photographer, Yuri Arcurs is creating a microstock empire. Here's a summary of his new entrepreneurial activities.
http://www.microstockdiaries.com/meet-the-new-yuri-arcurs-microstock-entrepreneur.html
