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Tony Rogers February 11th, 2005 12:50 AM

Tax Deductions...
 
A my co-producer is working with his accountant on getting tax relief for a recent independent film we are producing. As he has done a lot of freelance graphics work, etc. he is more familiar with these issues, but I was wondering if there were any online or readily-available books on tax deductions for low budget and independently produced/financed films. I know that there are new deductions possible, but I don't want to be a sitting duck for the IRS either. I'm not sure if i make enough to warrant any problems at the federal level, but still...

No, our first two productions are not likely to be very marketable and are intended to be non-profit festival pieces, but they both have several thousand dollar budgets.

Peter Wiley February 14th, 2005 09:23 PM

The new tax provisions apparently apply to productions with budgets between $1 and $15 million. See:

http://www.filmmakermagazine.com/win...ief_effort.php

If you are engaged in a business activity with the intention of making a profit the IRS is going to consider you a business. The benefit is you will get to take business tax deductions. The drawback is you will be subject to taxes on your business income, such as the self-employment tax (i.e. your own Social Security and related payroll contributions -- 15% or more IN ADDITION to your income tax).

"Non-profit", for tax purposes, means you have applied to the IRS for non-profit status as a charitable or educational organization. Just because you don't make a profit does not make you a "non profit" -- it just means you are having a business loss.

Any decent book on small business taxes can walk you through the basic tax and accounting concepts. They don't vary too much from business to business, although the tax code is full of special specific provisions for various businesses. It's always a good idea to speak with a tax professional (accountant or lawyer) with expertise in your area.


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