End of year Tax planning as a Filmmaker and Videographer

For most filmmakers, videographers, and video production company owners, taxes are the biggest expense they have each year.

I just had a long end-of-the-year conversation/tax planning session with my CPA and I wanted to share some of the info with you.

This is not financial advice for you, and I recommend you talk to your CPA or hire one for specific advice for your situation.

The first thing I do when I have a profitable year is to see if I can make any end-of-year investments that can help my business grow the following year. I’ve done with every single year for 15 years now.

Most of the time, this is investing in new equipment like cameras, lenses, lighting, and office equipment.

I sometimes even pre-pay for subscriptions such as Adobe for example.

I also make sure if I’ve hired any vendors that I pay them before the end of the year, so I can take that expense.

I never buy things that I can’t justify to grow the business through. I’d rather pay taxes than buy a camera that I won’t ever use.

Next, I pay out bonuses. This is another expense that can be deducted and a great motivator for your employees.

My next dedication is retirement. When I first started with retirement, I use a traditional IRA. The limit changes each year but it’s currently $6500 and it can be a complete write-off. You can also use a Roth IRA. This is not tax-deductible, but the money grows and can be taken out in retirement, tax-free.

Once my business grew, I started a Solo 401k and there is also a SEP IRA. These have a far higher limit.
For example, the Solo 401k this year has a combined limit of 61,000 which can be a tax write-off.

Home office expense deduction is another great tax write-off. If you use a portion of your house that is dedicated solely to your business, you can write it off.

Next, I look at my mileage and auto-related expenses. If you are a freelancer, this is a huge dedication, so talk to your accountant about that.

I also have a Health Savings Account. You need a high deductible health care plan for this and not everyone qualifies for this, but you can contribute $3600 and it’s a tax deduction on your personal return and the money grows tax-free if invested. This money can be used for medical expenses.

I usually also make a donation at the end of the year either in form of cash or donating equipment or office supplies.

Again, hire an accountant that is a CPA to get personalized advice.

Learn the exact blueprint I used to go from a struggling videographer, to running a profitable video production business, in this one-hour free training.

[PF-Matt]

Good to mention that LLC can also elect to be taxed as an S-Corp with a few steps involved

[JonackFilm]

In Germany works this a lot different. It's ultra complicated. I think I have to pay around 15.000€ taxes next year. Made almost 100k this year :)

[danielbranam]

Good information. Just finished buying a few more pieces of kit to up my expenses for the year. I really like the idea of the s corp tax savings. I'm presently an LLC but next year may by a bigger year in income. May have to look at this structure to get the possible savings. Thanks again.

[rubberbumm]

Thanks started freelancing only a couple of months ago.

Not much of this applies to me but still nice to hear a more advanced perspective

[ShotByGabriel]

i’m a videographer, but haven’t registered my business yet or llc. i get many clients where should i start to make sure the taxes can get write off

[MyLifein]

Thanks for the video. If you hire a company to do your editing, are they 1099 employees or 1040?

[XVIIsionsProductions]

Yo Saj!! I’ve got a question for you! It’s a little off topic but, I can’t find the answer I nee anywhere! I’m currently freelancing, trying to build a production company and I want to know, WHEN is it appropriate for a video production company to agree to a “Works for hire” agreement.
I sent a proposal and I thought I outlined it properly stating that the final deliverables are owned by the client but the original or raw footage is owned by my company.
The client reached out with concerns and then sent me a works for hire agreement where it basically states that they want to own everything.
Now I’m stuck, do we agree to the exclusive work for hire agreement or do we try to adjust our original proposal agreement and reiterate that they own the final deliverables and other contained within that work but we own everything else still or do we do something different?
Help please?!
I really enjoy your teachings man, keep it up thanks!

[Daniel_Jones]

I'm disappointed by the advice to avoid a lot of Social Security and Medicare taxes by going the S Corp route. If we are making good money in video production, I think we have a responsibility to pay into the system.
Otherwise, I really like the channel and have benefited greatly from it. Thank you, Saj!
-Daniel

[Flamezytheproducer]

Good morning, is there a community page like on telegram or linked where we can send you personal messages. I'm currently stuck in my film making career and would really love to get personal advice from you.