How Good Tax Prep This Year Can Save You Time, Money, and Heartache Next Year — Part 2

If you were here on Monday and I bored you half to death with my tips for improving your tax situation for the coming year, get ready for the other half. I know that nobody actually likes to think about this stuff. We’d all much rather learn how to make a kickass softbox with a box of matches, a flashlight, and a roll of toilet paper. Eventually, though, taking charge of your photography’s financial well-being becomes one of those cross-roads moments. Might as well rip that bandage off and grab the bull by the horns.

For those of you keeping score, that was three metaphors in a single paragraph. The bottom line? Just do it.

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While Monday’s post concentrated pretty heavily on actual taxes, today I want to focus more on some of the simple, day-to-day things you can do to help yourself out.

Piggy Banks– Not Just for Kids

I know exactly how it feels living from gig to gig or paycheck to paycheck. It’s not fun, and it’s definitely not easy. I also know what it’s like to have a 12-year-old eating me out of house and home and growing faster than I can keep him clothed. The fact remains, though, that you have to save some of what’s coming in– even if it’s just the loose change in your pockets at the end of the day. Eventually it adds up, helping you out when equipment goes down or when your kid cleans out the refrigerator while you’re out shooting.

Don’t Buy What You Can’t Afford

Say it with me– Credit cards are the devil’s currency. I learned the hard way to pay cash for everything.   Don’t let the GAS get you down.  NOTE: In the originally published version of this article I actually laid out all of the math involved. The only problem is that I did it wrong because I’m a math imbecile, so I subsequently removed it from the post. Suffice it to say that unless you are able to completely pay your credit card balance on time every month, leave the card in your wallet and wait until you can afford the shiny new trinket.

Rent What You Can’t Afford to Buy

Renting equipment was not always as easy as it is today. With the growth of companies like Aperturent, LensProToGo, and BorrowLenses, renting everything– from lenses and bodies, to lighting and modifiers– is both convenient and affordable. Besides the obvious affordability benefits, the other big upside to renting is the chance to extensively test a piece of gear and make sure you really want it before spending your hard-earned money on it. Sometimes the magic wears off pretty quickly, leaving you either stuck with a very expensive paperweight, or taking a huge loss when you sell it on ebay.

Learn to Calculate Your CODB

The first time my accountant asked me what my Cost of Doing Business was, I got a glassed-over look in my eyes and it sounded like he was talking to me from under water. Knowing your CODB is one of the most essential steps you can take to improving the financial well-being of your business. Every financial aspect of your business stems from this number– especially knowing what to charge. The American Society of Media Photographers has a great online calculator to help you with this, as does the National Press Photographers Association.

Buy In Bulk

Warehouse clubs have become a great money-saving tool in recent years, but buying in bulk can be a pain. Find a couple of friend with whom to spread the stock– and the savings. Regardless of whether you work out of your house or own a studio, it’s easy to start saving money on things like batteries, bottled water, office supplies, and a host of other regular necessities.

Get Organized

There are a million ways to do this– at least one of them is right for you. Whether it’s setting reminders on your phone or keeping a calendar on your tablet, find a way to get– and stay– organized. For me, it’s a bit of old school meets new. At any given time, I have two legal pads on my desk– one for business and one for personal. I tend to work better when I have an actual list in front of me for quick reference. Combined with the Reminders app on my phone, they usually do a pretty good job of keeping me organized and on task. The less time you spend trying to remember what you forgot, the more time you have to concentrate on your bottom line.

Get a Second Opinion

There is no single “right” path for any of this. We get second and third opinions from doctors, contractors, and all sorts of other professionals in our lives, so don’t assume that everything that comes out of an accountant’s mouth is gospel. If it doesn’t sound right, get a second opinion.

Wrap-Up: It Can’t Always Be About the Art

I wish it could be, but it’s not. It’s also about taking care of you and your family. The photography road is riddled with potholes and hidden curves just waiting to throw you off course. Do yourself a favor– take the time to implement a few smart financial changes. It’s a pain in the ass when you first start, but the money, stress, and heartache you save yourself down the road will be more than worth the effort.

PLEASE NOTE: This article is intended for informational and reference purposes only, and contains no express or implied warranties. As noted, neither the author nor DIY Photography are accountants, financial advisors, or tax professionals. We strongly urge you to consult with a professional in your area for any necessary legal, financial, and tax advice..

 

  • http://tahoeshooter.com Jon Peckham

    This is total BS. Taxation is theft because they use force to take it. It is the moral equivalent of driving your children to a known pedophiles house! Save the hassle and don’t file. 50% of North American people don’t. Stop supporting Force and violence . . .

  • David Thomas

    Bad math on the credit card interest. They charge an annual percentage rate, not 12% monthly! Your first month would be $34, not $408 in interest. (slightly higher than 1% per month with your example because they compound that interest on a daily basis.) It’s still not ideal to leave a balance, and I agree with avoiding credit as much as you can.

    • Jeffrey Guyer

      Brain blitz on my part David. Thanks for clearing that up. I should never attempt math late at night. :)