I'm an amateur photographer that occasionally gets paid for their work. My return is usually linked to how much I want to take on, which normally isn't a whole lot. However, I do receive small revenue from this work, usually only a few thousand dollars a year.
At what point does it make sense for me to file LLC and use the tax deductions associated with this?=========>>If you want to
set up a LLC, you as a sole owner, need to establish a SMLLC, a very common form of business ownership for a solo business owner formed under state laws and regulations , NOT LLC;your SMLLC pays income tax as a sole proprietor. That is, the business taxesare filed using Sch C and the net income of the business is incorporated into your personal tax return on 1040 . so you may claim all ofyour BUSINESS related expenses on your SCh C of 1040.Aslongas the amt on SCh C line 29 / 31 is $400 or exceeds $400, then you need to file return and also if the amt on Sch SE line 2 / 3 is also $400 or exceeds $400 then you need to pay self employment tax but can claim 50% of your SECA tax on your 1040 line 27.
. . . and create a larger tax shelter umbrella?=====>.I guess it deepens; To be deductible, your business expense must be both ordinary and necessary, common and accepted in your trade / business. A necessary expense is one that is helpful and appropriate for your trade / business. An expense does not have to be indispensable to be considered necessary.
I already itemize my general taxes and am looking for help; especially since the costs associated with photography are so high. Keep in mind that I could probably generate more than the estimated few thousand dollars if I were "incentivized" to do so. =======>>>>. Correrct; you need to itemize your expenses on your SCh A of 1040 ; when it comes to reducing your taxable income, itemizing your deductions can really maximize your tax savings. The benefit of itemizing is that it allows you to claim a larger deduction that the standard deduction. You need to maintain records of all your expenses.
I am a single male that makes over 100k a year with my normal job so I am absolutely getting killed on taxes. =========>>UNLESS your W2 income is $118,500 or exceeds $118,500, then you still need to pay both fica taxes on your reg W2 income and self employment on your self employer income as an amateur photographer.