Deposits and booking retainers
A wedding or event booking usually starts with a non-refundable retainer. Until the event takes place, the money is often better treated as unearned revenue under accrual accounting, or at least tracked on a list of booked jobs. Cash-basis taxpayers record it when received. Discuss with your CPA which method fits you, and make sure your contracts say what happens if you or the client cancels.
Gear, software and depreciation
Cameras, lenses, lighting, computers and drones are business assets. Larger purchases may be depreciated or deducted under special rules, which change from year to year. Keep a list showing the item, date, price and serial number, which also helps for insurance claims. Subscriptions for editing software, cloud storage and gallery hosting are ordinary monthly expenses. Separate them so you can see how much of your revenue they use.
Second shooters, assistants and editors
People who help you on a job may be contractors or employees depending on control and how they work. For contractors, get a W-9 before paying and issue a 1099-NEC when required. Pay for outsourced editing as a cost of services, tagged to the job. Having a signed agreement covering ownership of images and confidentiality is also wise, and an attorney can draft it.
Licensing, prints and sales tax
Licensing fees, stock sales and print orders have different margins. Use different income accounts for session fees, products and licensing. Whether sales tax applies to your photography services or tangible prints varies by state, and the line between a service and a product can be confusing. Check with your state tax agency, and record any tax collected as a liability.
Travel, mileage and the home studio
Travel to a shoot is generally deductible, with receipts and a mileage log. Props, backdrops, wardrobe for clients, and studio rent are expenses too. A home studio may qualify for a deduction only if the space meets regular and exclusive use rules, so ask a tax professional.
Finally, track profit per shoot. Include editing hours, travel, gear wear and any assistant. A wedding that books at a high price but needs forty hours of editing may earn less per hour than a mini session day. Your books should make that visible.
A seasonal cash plan
Most photographers have a busy season and a slow one. In the busy months, set aside tax money and a reserve before buying gear. Time big equipment purchases for when you have the cash, and write down what each item is expected to earn. If a new lens opens a service you can charge more for, it has a reason. If not, a rental might be smarter. Reviewing this each quarter keeps spending connected to income.
Put the payment schedule, the delivery date and late fees in writing. Release final images only after the balance is paid, as your contract allows. Aging reports show which clients are slipping before the delivery date arrives.
Common questions
Is a non-refundable retainer income right away?
Tax treatment depends on your method and contract. Ask a CPA, and be consistent in how you record it.
Do I need a separate account for client galleries and software?
Not a separate account, but tracking them as their own expense lines is useful for pricing your packages.
This guide is general information, not tax, legal or accounting advice. Rules, fees and due dates change; check with the IRS, the NJ Division of Taxation or a licensed professional for your situation.