Author Topic: What percentage of tax do you pay on your microstock income? (Read 14987 times)

spike · « **on:** February 05, 2016, 12:16 »

I understand this is a complex issue which is also affected by your situation (are you employed, married, etc.), but I'd like to see the estimate of what percentage you pay due to taxation.

In my case, tax is pretty bad, and (in my microstock earnings bracket) accounts for roughly 45% of "lost revenue". I mean, for each 1000 USD that I make on microstock, I need to pay around 450 USD for taxes.

That's crazy, and I'm actually thinking of relocating due to that. I'm in the EU.

What's your situation, what chunk of your microstock income do taxes eat?

Mantis · « **Reply #1 on:** February 05, 2016, 12:40 »

I have a day job too so micro pushes me into higher tax brackets, I pay roughly 38 percent when I add federal and state taxes.

cthoman · « **Reply #2 on:** February 05, 2016, 12:40 »

Taxes are kind of a loaded question. I probably only write a check to Uncle Sam for about 20%, but that doesn't include health insurance or other perks that higher taxes might get you in another country. I live in a state with no state income tax, but that might mean I pay more in property tax or sales tax than another state. I'd say if you are planning on moving to look at all the factors.

cathyslife · « **Reply #3 on:** February 05, 2016, 12:49 »

Quote from: spike on February 05, 2016, 12:16

In my case, tax is pretty bad, and (in my microstock earnings bracket) accounts for roughly 45% of "lost revenue". I mean, for each 1000 USD that I make on microstock, I need to pay around 450 USD for taxes.

I am not a tax expert, but that sounds awfully high. Here's a tax bracket calculator.

http://www.moneychimp.com/features/tax_brackets.htm

The highest tax they have is 39.6% and this for someone making over $413,200. Hope this helps.

Sean Locke Photography · « **Reply #4 on:** February 05, 2016, 13:16 »

Quote from: cathyslife on February 05, 2016, 12:49

Quote from: spike on February 05, 2016, 12:16
In my case, tax is pretty bad, and (in my microstock earnings bracket) accounts for roughly 45% of "lost revenue". I mean, for each 1000 USD that I make on microstock, I need to pay around 450 USD for taxes.

I am not a tax expert, but that sounds awfully high. Here's a tax bracket calculator.

http://www.moneychimp.com/features/tax_brackets.htm

The highest tax they have is 39.6% and this for someone making over $413,200. Hope this helps.

"That's crazy, and I'm actually thinking of relocating due to that. I'm in the EU."

ShadySue · « **Reply #5 on:** February 05, 2016, 16:06 »

There isn't one EU tax scale, but for comparison, I'm in the EU / UK, and now that I've quit my day job, I'm back on basic level tax, so 20% - minus various allowable tax expenses which I let my accountant deal with.

Anyka · « **Reply #6 on:** February 06, 2016, 01:50 »

Though Belgium is considered a HEAVY taxing country, this does not go for royalties. Royalties are not added up with other income in Belgium, and as a result I pay 15% on my stock income (and a lot more on my other photography income).

sharpshot · « **Reply #7 on:** February 06, 2016, 02:30 »

Quote from: ShadySue on February 05, 2016, 16:06

There isn't one EU tax scale, but for comparison, I'm in the EU / UK, and now that I've quit my day job, I'm back on basic level tax, so 20% - minus various allowable tax expenses which I let my accountant deal with.

That's just income tax. The UK also has national insurance, council tax, VAT, capital gains tax, road tax, the highest tax on fuel imaginable, inheritance tax, customs duty, stamp duty when you sell a house and I'm not sure that's all of them.

Anyka · « **Reply #8 on:** February 06, 2016, 03:52 »

Quote from: sharpshot on February 06, 2016, 02:30

Quote from: ShadySue on February 05, 2016, 16:06
There isn't one EU tax scale, but for comparison, I'm in the EU / UK, and now that I've quit my day job, I'm back on basic level tax, so 20% - minus various allowable tax expenses which I let my accountant deal with.
That's just income tax. The UK also has national insurance, council tax, VAT, capital gains tax, road tax, the highest tax on fuel imaginable, inheritance tax, customs duty, stamp duty when you sell a house and I'm not sure that's all of them.

You forgot car tax ? Water tax ? Waste tax ?

pkphotos · « **Reply #9 on:** February 06, 2016, 04:14 »

If you're a travel photographer you can claim all of your travel expenses. So by the tie you subtract your expenses from your income there is often no tax to pay at all.

fotoVoyager · « **Reply #10 on:** February 06, 2016, 04:35 »

Quote from: pkphotos on February 06, 2016, 04:14

If you're a travel photographer you can claim all of your travel expenses. So by the tie you subtract your expenses from your income there is often no tax to pay at all.

You're not making any money then are you?

ShadySue · « **Reply #11 on:** February 06, 2016, 04:40 »

Quote from: sharpshot on February 06, 2016, 02:30

Quote from: ShadySue on February 05, 2016, 16:06
There isn't one EU tax scale, but for comparison, I'm in the EU / UK, and now that I've quit my day job, I'm back on basic level tax, so 20% - minus various allowable tax expenses which I let my accountant deal with.
That's just income tax. The UK also has national insurance, council tax, VAT, capital gains tax, road tax, the highest tax on fuel imaginable, inheritance tax, customs duty, stamp duty when you sell a house and I'm not sure that's all of them.

But these are taxes I'd need to pay anyway; this thread was specifically about tax we pay on our microstock income (I'm a small fish, under the line for self-employed NI).

sharpshot · « **Reply #12 on:** February 06, 2016, 13:46 »

Quote from: ShadySue on February 06, 2016, 04:40

Quote from: sharpshot on February 06, 2016, 02:30
Quote from: ShadySue on February 05, 2016, 16:06
There isn't one EU tax scale, but for comparison, I'm in the EU / UK, and now that I've quit my day job, I'm back on basic level tax, so 20% - minus various allowable tax expenses which I let my accountant deal with.
That's just income tax. The UK also has national insurance, council tax, VAT, capital gains tax, road tax, the highest tax on fuel imaginable, inheritance tax, customs duty, stamp duty when you sell a house and I'm not sure that's all of them.
But these are taxes I'd need to pay anyway; this thread was specifically about tax we pay on our microstock income (I'm a small fish, under the line for self-employed NI).

Other countries have higher income tax that looks bad to us in the UK but they don't have some of the other taxes we pay or they are at lower rates. I think governments around the world have made all these different taxes to make it as complicated as possible and to try and fool us in to thinking they haven't raised taxes. Successive governments have known the voters don't like a rise in income tax, so they raise national insurance or VAT or some other tax.

The OP mentions relocating to avoid high taxes but I think that only looking at income tax isn't the way to do it, you have to look at all the taxes to work out if it is worthwhile relocating.

pkphotos · « **Reply #13 on:** February 06, 2016, 16:36 »

Quote from: fotoVoyager on February 06, 2016, 04:35

Quote from: pkphotos on February 06, 2016, 04:14
If you're a travel photographer you can claim all of your travel expenses. So by the tie you subtract your expenses from your income there is often no tax to pay at all.

You're not making any money then are you?

The difference with travel photography/videography as opposed to home based is the amount of expenses you can deduct. So whether or not someone is making money would depend how you look at this aspect.

spike · « **Reply #14 on:** February 08, 2016, 14:48 »

Quote from: sharpshot on February 06, 2016, 13:46

The OP mentions relocating to avoid high taxes but I think that only looking at income tax isn't the way to do it, you have to look at all the taxes to work out if it is worthwhile relocating.

Not necessarily. Once can be a tax resident at one country, and spend that money in a cheaper country which has higher taxes (but you don't care because you pay a low rate in a different country).

Zero Talent · « **Reply #15 on:** February 08, 2016, 15:55 »

Quote from: pkphotos on February 06, 2016, 04:14

If you're a travel photographer you can claim all of your travel expenses. So by the tie you subtract your expenses from your income there is often no tax to pay at all.

I'm afraid you won't be able to claim your vacation to Rio, in case you plan to.
Maybe only a small part: expenses strictly related to photography.

CJH · « **Reply #16 on:** February 08, 2016, 16:11 »

Just over 0%.

pkphotos · « **Reply #17 on:** February 08, 2016, 17:05 »

Quote from: Zero Talent on February 08, 2016, 15:55

Quote from: pkphotos on February 06, 2016, 04:14
If you're a travel photographer you can claim all of your travel expenses. So by the tie you subtract your expenses from your income there is often no tax to pay at all.

I'm afraid you won't be able to claim your vacation to Rio, in case you plan to.
Maybe only a small part: expenses strictly related to photography.

If you travel for work, then all expenses can be claimed.

Zero Talent · « **Reply #18 on:** February 08, 2016, 20:28 »

Quote from: pkphotos on February 08, 2016, 17:05

Quote from: Zero Talent on February 08, 2016, 15:55
Quote from: pkphotos on February 06, 2016, 04:14
If you're a travel photographer you can claim all of your travel expenses. So by the tie you subtract your expenses from your income there is often no tax to pay at all.

I'm afraid you won't be able to claim your vacation to Rio, in case you plan to.
Maybe only a small part: expenses strictly related to photography.

If you travel for work, then all expenses can be claimed.

Good luck in convincing the IRS to accept all you vacation expenses only because you snapped a few photos here and there!
They are not fools and photographers are a known target for a thourough scrutiny.

Sent from my SM-N910T using Tapatalk

Mantis · « **Reply #19 on:** February 08, 2016, 21:01 »

Quote from: Zero Talent on February 08, 2016, 20:28

Quote from: pkphotos on February 08, 2016, 17:05
Quote from: Zero Talent on February 08, 2016, 15:55
Quote from: pkphotos on February 06, 2016, 04:14
If you're a travel photographer you can claim all of your travel expenses. So by the tie you subtract your expenses from your income there is often no tax to pay at all.

I'm afraid you won't be able to claim your vacation to Rio, in case you plan to.
Maybe only a small part: expenses strictly related to photography.

If you travel for work, then all expenses can be claimed.

Good luck in convincing the IRS to accept all you vacation expenses only because you snapped a few photos here and there!
They are not fools and photographers are a known target for a thourough scrutiny.

Sent from my SM-N910T using Tapatalk

Definitely where people get into trouble. Just met with my accountant and as usual we vetted any travel expenses and honed them down to a level that he feels won't raise flags. The IRS is very sensitive to travel and camera gear. It is wise to be wise indeed.

spike · « **Reply #20 on:** February 08, 2016, 22:04 »

Quote from: CJH on February 08, 2016, 16:11

Just over 0%.

Where?

pkphotos · « **Reply #21 on:** February 08, 2016, 22:45 »

Quote from: Zero Talent on February 08, 2016, 20:28

Quote from: pkphotos on February 08, 2016, 17:05
Quote from: Zero Talent on February 08, 2016, 15:55
Quote from: pkphotos on February 06, 2016, 04:14
If you're a travel photographer you can claim all of your travel expenses. So by the tie you subtract your expenses from your income there is often no tax to pay at all.

I'm afraid you won't be able to claim your vacation to Rio, in case you plan to.
Maybe only a small part: expenses strictly related to photography.

If you travel for work, then all expenses can be claimed.

Good luck in convincing the IRS to accept all you vacation expenses only because you snapped a few photos here and there!
They are not fools and photographers are a known target for a thourough scrutiny.

Sent from my SM-N910T using Tapatalk

It may depend what country you're in. And there's a big difference to someone taking a holiday and taking a few snaps to try and justify some expenses as opposed to a full time travel photographer who is on the road indefinitely. Professional full time travel photographers who are never at home are not taking holidays as you put it, they are going about their profession. There is a big difference between the two.

Gannet77 · « **Reply #22 on:** February 09, 2016, 04:49 »

Quote from: spike on February 08, 2016, 22:04

Quote from: CJH on February 08, 2016, 16:11
Just over 0%.

Where?

Google it.

charged · « **Reply #23 on:** February 10, 2016, 01:14 »

Quote from: Mantis on February 08, 2016, 21:01

Quote from: Zero Talent on February 08, 2016, 20:28
Quote from: pkphotos on February 08, 2016, 17:05
Quote from: Zero Talent on February 08, 2016, 15:55
Quote from: pkphotos on February 06, 2016, 04:14
If you're a travel photographer you can claim all of your travel expenses. So by the tie you subtract your expenses from your income there is often no tax to pay at all.

I'm afraid you won't be able to claim your vacation to Rio, in case you plan to.
Maybe only a small part: expenses strictly related to photography.

If you travel for work, then all expenses can be claimed.

Good luck in convincing the IRS to accept all you vacation expenses only because you snapped a few photos here and there!
They are not fools and photographers are a known target for a thourough scrutiny.

Sent from my SM-N910T using Tapatalk

Definitely where people get into trouble. Just met with my accountant and as usual we vetted any travel expenses and honed them down to a level that he feels won't raise flags. The IRS is very sensitive to travel and camera gear. It is wise to be wise indeed.

I checked with my accountant recently and he said I can deduct all expenses when I travel. Most of my travel days are arranged by what locations I want to photograph. And I often do skip things that I might do as a tourist but have no photo value. Guess I'll find out what the IRS thinks when and if I get audited.

Harvepino · « **Reply #24 on:** February 10, 2016, 06:44 »

EU member state. The latest calculation from last week from one of our financial portals was on average 55% of income going to state - this includes revenue tax 20%, health insurance, social insurance, VAT 20% and some other smaller fees.

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Author Topic: What percentage of tax do you pay on your microstock income? (Read 14987 times)

spike

Mantis

cthoman

cathyslife

Sean Locke Photography

ShadySue

Anyka

sharpshot

Anyka

pkphotos

fotoVoyager

ShadySue

sharpshot

pkphotos

spike

Zero Talent

CJH

pkphotos

Zero Talent

Mantis

spike

pkphotos

Gannet77

charged

Harvepino

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