Deducting Cameras
August 2001
A really good camera would be a great investment for your business. All kids love to see themselves in pictures and also on video. Pictures and videos of children laughing and playing are a great way to entertain kids and record special memories of parties or special events. They are also a wonderful marketing tool for your business!
You could have a video of children playing and learning to show when you interview prospective parents. You could also make a photo collection of special events or just everyday fun to show parents. Birthdays and field trips could be captured on film as special gifts for children. You could have a scrapbook activity project for children and photos could be included as a part of the book. You could even use a digital camera to post pictures to the parents at work. Put up a giant bulletin board covered with pictures of smiling, happy kids in your entryway or foyer; it makes a great first impression. Some providers assemble a photo album as a memento to give to the child when she/he leaves.
Whenever you are using photos or videos in your business, make sure you get written permission from parents before doing so.
If the camera or camcorder costs more than $100, the general rule is that you must depreciate it over seven years. However, if you use it more than 50% of the time in your business, you could claim the business expense in one year, using the Section 179 rule. In order to determine how much of the cost you can deduct (whether over seven years or one year) you should keep a log for about two months showing the business and personal use of the item. In other words, if you show that you took 25 pictures for your business and 15 pictures for your family, you could claim 63% (25/40) as a business expense. Make sure that the several months that you are tracking the use of your camera is representative of the entire year. Use this same business use percent for the cost of the film and film development.
Remember, if you haven't saved receipts for items in your home that you want to depreciate or use as expenses on your taxes, photos are one way of keep adequate records to help prove that you owned the item if you ever are in an audit situation. This can be particularly useful in creating an inventory of all of your furniture and appliances-yet another business use! All of the trips to pick up film, batteries, or processed photos can be deducted from your taxes, as long as the primary purpose of the trip was for business.
