I’ve been upgrading my gear here and there in the past few months. I prefer buying things new, because I’m a strong believer in warranties and reselling goods later. However, as I was shopping for a couple of new lenses, I learned a few things about the used photo gear market. I thought I might as well share them. Here are few tips you should keep in mind.

First, there are quite a few sources you can turn to. It used to be that used equipment was sold mostly through eBay, but these days we have a lot of options. The largest of them is Keh.com. While I’ve never bought any equipment through them, I’ve sold a lens and a camera through them, and they gave me both a fair purchase price, and a great customer service. You can also use B&H and Adorama used equipment departments. From all I’ve read, there are also great to deal with, whether to buy or sell gear. An advantage of dealing with these places is that they tend to have 90-days warranties on the gear they sell.

Second, eBay and Craigslist still remain viable options. Just last week I bought Nikon SB-800 speedlight on eBay. It turned out to be in great shape. It doesn’t have a warranty, but it’s still a Nikon flash, and from what I can tell, I bought it from a photographer rather than a reseller. That guy had a bunch of other photo gear listed on eBay and in his description, he used language that is typically used by photographers. Always check for these things. I also know that eBay guarantees their purchases, so if anything was wrong with the flash, I could get a refund if the seller failed to refund me.

As for Craigslist, I was looking for a 85mm f/1.4 lens there and almost went as far as meeting with the seller. I’m more concerned about buying via Craigslist because there is no guarantee there, or ability to get a refund, in case I buy a lemon. Before meeting the seller, I emailed him and asked for lens serial number. The seller refused to provide it to me, which raised a red flag for me. Why would he be afraid of sharing the serial number? All I was going to do is put it through Nikon charts to ensure the serial number is legit, and then run it through search engines. In today’s world, most of stolen lenses and camera bodies are listed as stolen somewhere on the internet. By the way, if you get your gear stolen, post an entry on a blog somewhere where search engines will pick it up. You just might get lucky and your gear will be found, as it was found for my buddy Shims few months ago. Check out that amazing story here.

The refusal to share the serial number led me to believe that the seller was trying to unload what’s most likely a stolen lens. Why else would he not share a serial number? It’s not like I can run a background check on that lens, or steal his identity. Another red flag was that this guy was communicating with me via email that had eseller4life in it, and no real name.

If I am going to drop $1,100 on something, I want to make sure I’m buying it from a legit seller and I am doing it legally.

Upon my insistance to get a valid serial number, the seller started calling me names. In my mind, that’s not the best way to do business online. In the end, I end up buying that lens new. Always keep the risks in mind when you’re trying to save money.

Sometimes buying used may not be worth it.

If you bought used gear before, and have any other tips or stories to share, please share them by leaving a comment.

If you are a Blackberry user like me who also happens to love outdoors, there is one application I recently discovered that you may find very handy while outdoors, whether you are a photographer or you simply enjoy running or hiking and it’s called BlackStar. What it does is that it turns your Blackberry into handheld GPS device, the one you typically buy for 100+ dollars. I been using BlackStar for several weeks now and here is why I love it.

I’ve always wanted to have GPS tracking device connected to my camera so that the camera records the exact location of where I took my photos. However, I could never justify paying $150 for such a toy. I simply consider it a luxury I could live without. However, now I no longer need a device like this as long as I have my Blackberry with me. When I’m on a spot taking pictures, all I have to do is go into BlackStar application, record a new Waypoint that will record my exact coordinates, and then come home and enter these coordinates durectly into EXIF data while importing into Lightroom or into Flickr Map when mapping my photos online.

Not only that, I recently used BlackStar to locate a hidden beach where I took “Links into the Past” image that I posted in my last post. I’ve never been to that beach, but I’ve seen pictures that were taken there, and Flickr Map helped me see the exact coordinates of where that beach was located, since my buddy Jim Patterson, who’ve shot at that beach before, geotags all his photos. All I had to do was keep BlackStar on when driving on Highway 1 and it would tell me exactly how close I was to the beach I was looking for. Once I was within 100 feet, I pulled over, found a trail and getting to the beach was simply a matter of hiking down. I can now pre-map the exact locations where I want to shoot, and then find the location with precision of few feet.

Another feature of this application that I like is that it is fully integrated with Google and Blackberry Maps. You can list a Waypoint, and then jump into Google Maps, switch to Satellite or Street view and see exactly what is around you. In fact, you can check local weather while you’re at it and if even play geocatching, if you’re into that sort of thing.

If you are into running or hiking and would like to track your mileage, you can do that too by turning on tracking feature and you’ll know the exact distance you have traveled. You can export all that data into your computer afterward. I have not yet tried the exporting feature yet to see how good it works.

So far it’s it’s available for Blackberry devices only, but I’m thinking it won’t be too long before it’s available for iPhone users as well.

The best part about this application is that it’s absolutely free.

Overall, I’m glad Zenfolio is constantly rolling out new features, and these two described above is a good upgrade in features.

Couple of days ago I saw someone on Twitter mention the newly launched MpixPro, a new printing lab with focus on pro photographers. I thought, what the heck, let’s check it out. I went on their web-site, read all I could about it and applied for the account. I got my acceptance response in less than three hours, then the same night I uploaded 5 test photos they printed and shipped to me for free, and today I already have my photos on hand. Not a bad start.

Here is the thing. I’ve always wanted Mpix to enter this kind of market and compete with other labs who cater to heavy printing photographers. I stuck with Mpix for several years now, even though they did not have a web-site dedicated to pro photographers, and I’ve always been happy with their service. Their web-site is easy to operate, their prints look great and arrive in boxes that allows prints to remain unfolded no matter what size, and I always get them fast. Well, now they have entered that market, and I’m sure you will hear more about the service in the near future from many other photographers who are signing up right now. In fact, Scott Kelby wrote today he’ll have a review coming up soon.

My first impression is that this is going to be the way I will print from now on. Their prices are, of course, the same as Mpix’ regular service, but the nice feature is that they charge just $4 for FedEx the next day option. Their catalog is also twice the size and they added a whole load of new press products, and several fine art papers. What I also loved is that along with my prints, which I got in the usual Mpix’ high quality, they’ve included a paper sample kit, displayed on the photo below, which gives me a good idea of what other papers are. With all the new products, it’s handy that I can know that without having have to spend any money to test those papers out.

I hope Mpix succeeds in this new endeavor. I’ll post a more detailed review in the future after I use the service for an extended period of time.

I do not upload any photos to Facebook, with the exception of an occasional profile shot and here is why. I always found extremely irritating and disappointing how their server and their resizing algorithm handles photos. Over 30 million photos get uploaded to Facebook daily, and yet not a lot of people notice the substantial decrease in quality of photos as they get resized to be displayed on the web-site. Perhaps majority of Facebook users don’t care, but I always found it strange that some photographers I know still upload their photos on Facebook, despite how Facebook degrades these photos in the process.

Let me illustrate this with a couple of examples.

I find it hard to ignore the obvious degradation in quality when I compare Facebook with Flickr versions of the same jpeg file. When uploaded to Facebook, images tend to lose contrast, change color, and most importantly, they lose sharpness. What I’m seeing is a different photograph that is not rendered in the way I intended it to be rendered.

While I acknowledge that Facebook’s prime goal is not to display photography, I still do not fully understand why they take their photo rendering code for granted, especially in today’s world where everyone owns a digital camera.

My solution is not to upload any photos to Facebook, and continue to host my photography on Flickr. Their resizing algorithms aren’t perfect either, but I find it satisfactory most of the time, and contrast, color and sharpness is preserved.

When I first published a post about tax applications of being a part-time photographer, the question I was asked more than any other was, what about sales tax? So this post  will address that question for photographers residing in California. The problem is, sales tax rules vary from state to state, and in fact, a few states don’t even have sales tax. But I thought I would at least address my own state, as I know many of this blog’s readers are from California and may find this information useful. Those who reside in other states may also find this helpful, as states tend to have similar rules.

What will follow are the tips that are considered to be general sales tax knowledge and do not represent official interpretations of the tax law found in the Internal Revenue Code, regulations, rulings and state law. My views also do not represent the views of my employer, and this blog is not affiliated with it in any way. Everything that is written in this post was not intended or written to be used, for the purpose of avoiding U.S. federal, state or local tax penalties.

1. Where to Find the Law. First, and most useful source of information, of course, is a tax law itself. Sales tax law for photographers, photo finisher and photocopiers is currently found in Regulation 1528 (originally issued in 1951) and you may find the copy of it here. It’s not very long, and every Californian photographer should read it. Second, since regulation is not long and is somewhat general (and yes, written back in 1951), it’s useful to read the current publication issued by the State Board of Equalization ion 2007, that gives further guidance helping photographers understand the application of the sales and use tax to various scenarios, titled “Tax Tips for Photographers, Photo Finishers, and Film Processing Laboratories“. Each state typically has a similar publication available, and I definitely recommend finding it and reading it thoroughly periodically, if you want to avoid the pain of audits, penalties, interest and fees assessed against you. I recommend spending some time on the State Board of Equalization web-site where you’ll find all kinds of other useful and applicable information on how to stay compliant with sales tax rules. Finally, if none of these publications make sense to you, it’s a good sign you need to spend some time talking about this with your CPA or tax advisor.

2. When Sales Tax is Due. I pick those up from the Tax Tips publication above, but here is a brief summary of key points that every California photographer should remember when making sales.

• Generally, all sales of merchandise in California is subject to sales tax, unless an exception applies
• Labor may also be taxable (for example, matting prints, retouching images, custom cropping, and so forth)
• Photographers must collect sales tax from their customers when creating a photographic product when it becomes a physical object (a print, or digital file delivered on a physical store medium, such as a disk, DVD, CD, or flash memory card)
• If at any any point of time you delivered a photo product on a physical medium or an object, the whole sale becomes taxable. So for example, if you are shooting a wedding and delivering an album to your clients or a few prints, the whole fee they paid you for a wedding becomes subject to state tax
• Sales of capital assets that you have used in a business are also subject to sales tax. Yes, it means that you should collect sales tax for that used camera body or a lens you’re selling to someone else

3. When Sales Tax is Not Due.

• If you transfer a photograph electronically (for example, you upload it to a web-site or send it via email) to a customer, and you do not include any physical product in your sale, sales tax does not apply. To clarify this, you are simply delivering an image to your client after a shoot (for example, a family portrait session), and you’re not transferring copyright or licensing an image for an advertising campaign.
• Make sure you properly document it by keeping a copy of an email or a screenshot of FTP folder where you uploaded that file in case state auditor wants to see a proof of why you did not collect sales tax on that particular sale
• The sale of prints, services or other good to customers who live outside of California is generally not taxable, provided you ship the items directly to a customer at a destination outside the state and you use your own business vehicles or common mail carries to do so. Again, keep good records of that for the future
• If you’re shipping an item to a California resident at an out-of-state address, you must collect use tax, unless you get a written statement signed by the purchasor stating that the item is purchased for out-of-state use for more than 90 days from the purchase date
• Sales tax does not apply to sales made to U.S. government or to government-related corporations
• Shipping charges are typically not subject to sales tax if they are stated separately on the invoice
• The sales and use tax rules with regard to transferring a copyright or licensing an imagine to stock agencies, newspapers, magazines, advertising agencies and so forth are more complex, and I will address them separately in a future post.

4. Reporting Requirements

• Ultimately, you are responsible for paying sales tax on all of your taxable sales. Of course, you collect it from a customer, but if you failed to do so, when audited, the state will ask you to pay the sales tax regardless, and it might not be very convenient to track down a customer who bought a print from you five years ago and ask her to pay the sales tax on that purchase, five years later
• You must report all of your sales on your sales and use tax return, including nontaxable sales. In other words, you must file sales and use tax return every year or every quarter, even if you’re not making a lot of taxable sales within California
• If you don’t already own a California Seller’s Permit, you better get one now, as this is the first thing the auditor may ask to see
• When you’re assessed late tax, the additional penalties for non payment can be as high as 10% of sales tax assessed, plus interest

As always, please ask questions in comments and I hope I can help you find answers.

Since I am an accountant by education and by trade, I thought with tax season on everyone’s mind, I’ll share a few tips or answers to the frequently asked questions from other photographers that I get on a regular basis in my role as a photographer who’s also an accountant. If you’re a full time pro, or live outside of the United States, you might as well ignore this post because what I’ll share applies mainly to part time photographers filing tax returns in United States, who earn majority of their annual income through means other than photography. But let me first put a proper disclaimer on this.

What will follow are the tips that are considered to be general tax knowledge and do not represent official interpretations of the tax law found in the Internal Revenue Code, regulations and rulings. My views also do not represent the views of my employer, and this blog is not affiliated with it in any way. Everything that is written in this post was not intended or written to be used, for the purpose of avoiding U.S. federal, state or local tax penalties.

Why You Should Be Concerned About This?
If you made any income from your photography, you need to declare it on your tax return, even if it’s known only to you and your neighbor who paid you cash for shooting his dog. Worse yet, if you’ve been issued Form 1099-Misc by a magazine who bought your photo for publication, IRS already knows about that income since the form issuer sent a copy of it to the IRS and the IRS will be looking for it on your tax return. The quickest way to trigger an audit and tax penalties of your tax return is to not to report all of your income.

When Can Photography Loss Be Claimed on Your Return?
You must declare all income you get from photography, and you may offset it with your expenses if it is a business. In the eyes of the IRS, it is a business when it is ran with for-profit motive. The test that is typically used to determine whether it is a hobby or a business is the level of profitability. If the business has been profitable (generated more income than expenses) for 3 out of the last 5 years, it is a business, and if in the current year taxpayer has a net loss when items of income are netted against expenses, that loss can be used to offset other income. If you do not meet the test, the IRS considers your photography a hobby, and deductions allowed will be rather limited. Please see this IRS publication for more information.

What if I Just Started My Photography Business? Can I still Deduct that Nikon D3x?
Yes. But here is something to consider. Very few businesses are profitable in the first few years of its operations, and it is expected. If you just started your photography business, bought a nice new camera and a bunch of lenses, of course you’ll likely not generate more income in the first year than you just spent on the equipment. But you have to have a plan in mind of how you will turn it into a profitable enterprise in the next few years if you’re deducting your equipment in the first year. If after five years all you do is write off new lenses and cameras on your tax returns without becoming profitable, you should expect for the IRS to come in, open your old tax returns and disallow the deductions, assess penalties and tax owed on all the past tax returns where you claimed these as deductions.

What are the Risks of Claiming a Loss on Your Return?
This is the biggest issue to consider. Filing Schedule C, and especially using expenses or a net loss to offset your ordinary income is something that frequently triggers an audit of your tax return by the IRS. You simply should expect to get a letter from the IRS or from your state asking you to provide documentation and evidence for the positions taken on your tax return. With budget deficit projected to reach the level of $10 trillion, we’re expecting that the tax audits of individual returns will increase considerably in the coming years, since someone has to pay for it all. In addition, some returns get selected for audits at random, and it is always a good idea to have your tax files in good condition before you actually file the return. For example, good luck to you if you’re a photographer trying to make a living in Utah. Finally, declaring that you’re a business may trigger other collecting agencies, such as state or local tax authorities, to go after your income. A friend of mine recently received a notice that informed him that there is an annual business fee that all businesses pay in his city, and it is in the range of several hundred dollars.

What are the Filing Options?
It all depends on how you run your business. The easiest option is to file as a sole proprietor (which doesn’t require your business to be incorporated) by filing Schedule C with your 1040. The next popular option among the photographers is to form a Limited Liability Corporation (LLC) for the business. Generally speaking, forming an LLC is not too hard to do, but it does require payment of fees during incorporation and if it has more than one owner (if say, you add your spouse or an assistant as a member) it carries extra tax compliance burden every year. The main difference between being a sole proprietor or having an LLC is the level of liability protection. LLC option provides limited liability protection to its owners. In other words, if you’re being sued by your former client, whose wedding you messed up, that former client cannot go after your personal assets if you operate it as an LLC, whereas as a sole proprietor, all of your assets are at risk.

What Expenses Can You Write Off?
Whatever expenses were necessary to run your photography business. Photo equipment is allowed to be deducted over its useful life (typically, 7 years or full amount deducted in the year of purchase as an election available under Section 179). Other duductible expense inlude such items as flashes, tripods, computer software, training fees, membership fees, travel costs (for example, car mileage of traveling to the location and back) and so forth – again, whatever you need as a photographer to run your business.

What Evidence Should You Keep?
You should not be claiming any expenses on your tax return that you do not have a proper documentation for. Keep all the receipts (that’s why buying things online and using easily searchable email account, such as Gmail, can come handy when you need to find them quick), keep a detailed record of mileage with dates and miles traveled detailed for each trip, and overall, approach documentation with full expectation that one day an IRS agent will audit it. In general, the IRS is suspect of photography businesses when they are not main sources of income for taxpayers, since most people these days own a digital camera. You should consider opening a separate bank account for your business, keep accounting books in proper software (check out free Microsoft Accounting Express, for instance), have a web-site that promotes your business, and approach it like you would approach any for-profit business. You’ll have to prove to the IRS you’re serious about your photography business.

What’s the Safest Way of Properly Deducting the Photography Expenses?
The safest way is to hire a CPA to prepare your tax return, who can sign that return as paid preparer. This will ensure that the return is properly reviewed and filed. But this isn’t always the cheapest option. If you prepare your own tax return, TurboTax might be your next best option, as it is somewhat intuitive, and it does all the math for you. If you do not understand your own tax return when you look at it on paper, I do not recommend you attempt to fill out Schedule C on your own. As with most professional services, you get what you pay for, and savings generated by professionally prepared tax return can be significant and well worth paying little extra.

If you have other questions related to this topic, please feel free to leave them either in the comments, or by contacting me directly through the contact page.