So I am doing enough paid photography jobs that I need to report the income. I want to make sure I take advantage of all legitimate deductions and have kept mileage records, equipment receipts, etc.

If I understand correctly, I can elect to take a schedule 179 deduction for most of my equipment expenses in the first year instead of depreciating computer and camera equipment over 5-7 years.

My question has to do with the annual 179 limit. Clearly under the $500K amount, if I read correctly there is also a "business income limit" that says I can't deduct more than my net income.

The online filing software accepts all of my 179 elections, and my schedule C shows a net loss of about $4600 as a result without reporting any errors.


If I am reading the IRS publication correctly, the income limit is per taxpayer, not for the individual business. Since I also have income from my "day job" I am still able to take the max 179 elections since I have a positive net bottom line from my combined income sources.

I expect if it was a problem the tax software would catch it. I just would like some reassurance that I'm understanding the lawyer-babble IRS text correctly.

Photography is reportedly one of those home businesses that may be subject to additional IRS scrutiny, so I want to make sure everything I do is on the up and up.

I appreciate any input on the matter.

I'm no expert, but wouldn't it be simpler to put it on Schedule C, Part V, as a one-time expense? Figure that any of the items can have a one-year lifespan. Deduct it 100% at one time. I've listed computers and power tools on this spot. Now a backhoe, that would probably be a depreciated item. A new one, at least.

An accountant may want to do it differently, but we're not talking hundreds of thousands of dollars here.

I'm not a tax expert, but I suspect you're correct.

I have a company set up that has been trying to open another business this last year. No income, only expenses including the purchase of equipment. I haven't seen the return yet, but based on the conversation I had with the accountant when I first turned everything over, it sounded like it was all getting the 179 deduction.

I may be missing something here but I was incorporated as an S-corp and do not remember schedule 179. Are you incorporated or are you filing under your personal return? I do not know all the details but am aware that what you are asking about is treated differently depending on if incorporated or not and also there are handled differently depending on if incorporated as an S-corp or an LLC. If you plan to proceed with this business, I suggest you discuss tax implications for long-term with a tax guy.

Running as a sole proprietorship, Schedule C on my personal return.

The schedule 179 essentially lets you take the entire deduction at once for equipment that would otherwise require depreciation.

I suppose you could say a computer might only last a year, but the IRS says it is a 5 year depreciation item. 179 essentially lets you do the same one time deduction without running afoul based on the type of item expensed.

It is not a huge income here, 2015 was the first year and I grossed $3K. Last year I broke $8K, this year I am hoping to hit $10K. Not really at the point where I need to pay an accountant, I've always done my own taxes and years ago my wife did Avon so I am familiar with Schedule C and home office process.

The 179 thing is the only thing I have a question on, want to make sure I am understanding it correctly.