I bought a canon 5d and a canon 135L lens in 2007, all my previous cameras & lenses i have rented on monthly basis from my fomer employer. Anyway, I understand I have to figure out the depreciation and once that's figured out I have to use those figures in my deductions for my taxes. Can I not just deduct the whole expense in one year, rather than doing the 3 or 5 year deduction? It would help me a lot more this year by deducting the whole expense, so I will have less to pay in, do i have that option? ALso, for photo equipment, do you do the 3 year, or 5 year depreciation? any help would be appreciated.

It's my understanding that you can now deduct the whole expense in the first year. Check out the Code section...I think it's 179 - someone posted about this a few days ago, too.

I just had my taxes done yesterday. At first I started doing them and it got complicated really fast. I went out looking for a tax person... $370 later I'm very happy with what she did!!!

I think that paying a expert is the best way to do it. A couple wouldn't shoot their own wedding right?

For your first year in business you can deduct whole amount. Otherwise you MUST depreciate items which have a use life longer then a year. For photo gear it is 5 year depreciation and there is a schema how to depreciate it. You can't just divide the cost on 5 and deduct equal amounts each year. I got TaxCut for $25 and did all my taxes. It will walk you through all process.

I went through my accountant and what she told me is that for purchases of less than $10K can be depreciated in 1 year. She also explained that even in the first year in business, if you end up loosing $$ (that was me for last year), then it makes sense to depreciate equipment over 5 years, otherwise you'd be "increasing" your loss by depreciating everything in 1 year, but in the latter case, the government allows people to make the choice of depreciating everything in 1 year or in 5. Talk to an accountant to make sure.

Actually, I don't think that is true - it's based on when you put the item into service for business use, not when you started your business....sometimes they coincide, sometimes they don't. Using a tax prep analyst or tax software would certainly be helpful though.

Huh! My accountant told me something different.

Oh, really? I thought that was for the first year in business. Maybe I was wrong. Anyway, tax software will tell you what to do.

Alex - seems like there may be some different rules. If I remember correctly, the full depreciation in the first year is, to some extent, new. The newest tax software should walk you through the different options (we hope!)...of course, part of it depends on how much you took in for the year, too, because you usually can't deduct for more than you made! If you're just getting started, this is probably more applicable, but who knows....sorry to add to the confusion!

Thanks everyone for your answers. I checked out code 179 and looks like I have the option of depreciating it entirely in 1 year, which will help me out a lot this tax year. And I am going to do my taxes thru HR Block online, I am sure it will walk me thru it. thanks everyone.

Sounds like you already got your answer - yeah!

Also... it MAY be wise to a) figure out what you're making this year (a profit or loss) ... and if it's already a LOSS ... then b) DO NOT depreciate it all in the 1st year .... so you can take that depreciation expense out the following years it's in service and therefore have more tax-exempt expenses in years to come....