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Julian Block’s Tax Tips for Stock Photographers (Part 4)

September 9, 2009

Julian Block’s Tax Tips for Stock Photographers (Part 4)

PhotoEdit is proud to welcome back Julian Block, an attorney and leading expert on taxes from Larchmont, New York, who has been generously writing a series of articles for PhotoEdit about tax tips for stock photographers. We are grateful to Julian for his time and his expertise. In part four of this series, he discusses ways in which photographers can educate themselves about tax planning in order to maximize their profit and minimize their losses to the IRS.

Are you a stock photographer who wants to lose less to the IRS? Keeping good records is the key to mapping out strategies that you can use year after year to trim taxes. But organizing that ever-growing accumulation of records in your desk drawers, closets, and other storage spaces is just the first step for effective tax planning.

Educating yourself on the current tax opportunities and pitfalls can be an important second step. Ideally, you should be equipped to weigh the tax consequences before you make decisions on whether to invest, borrow or spend.

Multi-ethnic group of adults listens to instructor lecturing at a non-profit foundation's career-building program, Pine Bluff, AR

In these increasingly tough times, it is more vital than ever that stock photographers assume greater responsibility for their financial future. They ought not to rely exclusively on paid advisers to keep on top of tax-law changes or other legislation that might make it necessary to revise their plans. At the very least, photographers should be knowledgeable enough to raise good questions and evaluate answers when they deal with a professional. The informed client gets the best advice.

On a personal note, JFK was president when I first passed a bar exam. Eight presidents later, I still am constantly contacted by individuals seeking to disentangle themselves from problems created by their blind reliance on flawed advice from highly paid professionals. That is why I recommend photographers sign up for low-cost adult education courses on taxes, investing and other aspects of personal finance.

Photographers can pick from an array of continuing education courses tailored to their interests that are available at high schools, community colleges and the like. These courses are typically taught by attorneys, CPAs and financial planners: individuals with hands-on experience who are able to provide helpful, unbiased advice.

Black man wearing a bandanna uses 35mm camera to photograph Martin Luther King, Jr. parade in Liberty City, Miami, FL

What is particularly advantageous is that the courses make it possible for photographers to pick the brains of qualified instructors at a fraction of what it would otherwise cost to meet them on a one-to-one basis.

An example: in my near-New-York-City neck of the woods, the going hourly rate for tax lawyers commonly is several hundred dollars and up, whereas students generally pay about $40 at the adult ed places that offer my two-hour sessions on narrowly focused topics like how to take maximum advantage of changed rules for home sales.

Another decided advantage is that you and your fellow students get to ask questions about significant events in your financial lives. Some of the queries regularly fielded by me and my fellow instructors: the tax-right way to open, operate, or close business ventures; the tax and other legal consequences of getting hitched or unhitched; when and how much to remove from traditional IRAs or other tax-deferred retirement plans; and whether to make lifetime gifts of money and other kinds of property to family members or to leave the assets to them.

White middle-aged couple sitting at desk does their taxes together

Also, you learn money-saving techniques that you can apply yourself or, should you decide to seek professional help, test out on your advisers. And, conceivably, those advisers might turn out to be your instructors, whom you’ve had an excellent chance to evaluate.

Should some kinds of courses be shunned? Unquestionably, in my experience.

The adage that there is no free lunch is particularly apt when it comes to no-charge seminars sponsored by brokerage houses, insurance companies, etc. Far too often, these outfits use the talks mainly as marketing tools to promote (1) themselves, (2) dubious investment vehicles and other products designed to generate lucrative commissions for themselves and dismal returns for their clients, or (3) all of the above.

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This concludes the fourth article in the Tax Tips for Stock Photographers series. Stay tuned for future articles by our friend and colleague from New York. Julian Block, an attorney in Larchmont, New York, has been cited as a “leading tax professional” (New York Times), “an accomplished writer on taxes” (Wall Street Journal), and “an authority on tax planning” (Financial Planning Magazine). The information in the above article is excerpted from Tax Tips for Small Businesses: Savvy Ways for Writers, Photographers, Artists and Other Freelancers to Trim Taxes to the Legal Minimum, praised by law professor James E. Maule of Villanova University as “An easy-to-read and well-organized explanation of the tax rules. Business owners would be well advised to buy this book.” For more of Julian’s articles and to order his books, please visit julianblocktaxexpert.com. Copyright 2009 Julian Block. All rights reserved.

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