Are film Tax deductions and tax incentives the same?
- Thread starter sasha1984
- Start date
see your cpa.
https://vimeo.com/22031702
No, they are not the same, though a special tax deduction IS a type of tax incentive..
A tax deduction lets you subtract some amount from your taxable income.
Say you earned $100,000 and you normally pay 25% tax. The amount of tax you pay is easy, 25% of $100,000 or $25,000. Now pretend that you bought a new camera for $1000. Depending on how you do it, you "deduct" some PORTION (but not all) of the cost of the new camera from your income. Say the tax deduction for new cameras was 10% . 10% of $1000 is $100. Subtract that deduction from your income. $100,000. Your new "adjusted income" is $99,000. Now you pay 25% tax on $99,000 rather than $100,000. You new tax would be 25% of $99,000 or $24,750. That's a grand savings of $250!
Tax Incentives are government offered "tax breaks" such as a lower "local biz tax rates" or even a tax "credits" for certain purchases, some are just straight up cash payments. For example in Oregon a big production gets a check for %20 of all the production related purchases made in Oregon! That's some incentive!
https://vimeo.com/22031702
No, they are not the same, though a special tax deduction IS a type of tax incentive..
A tax deduction lets you subtract some amount from your taxable income.
Say you earned $100,000 and you normally pay 25% tax. The amount of tax you pay is easy, 25% of $100,000 or $25,000. Now pretend that you bought a new camera for $1000. Depending on how you do it, you "deduct" some PORTION (but not all) of the cost of the new camera from your income. Say the tax deduction for new cameras was 10% . 10% of $1000 is $100. Subtract that deduction from your income. $100,000. Your new "adjusted income" is $99,000. Now you pay 25% tax on $99,000 rather than $100,000. You new tax would be 25% of $99,000 or $24,750. That's a grand savings of $250!
Tax Incentives are government offered "tax breaks" such as a lower "local biz tax rates" or even a tax "credits" for certain purchases, some are just straight up cash payments. For example in Oregon a big production gets a check for %20 of all the production related purchases made in Oregon! That's some incentive!
http://www.indietalk.com/showthread.php?t=40055
Incentives = both rebates and credits
Note my remarks on rebates vs. credits.
Last I looked AZ had nothing.
However, adjacent states have some pretty good incentives.
Incentives = both rebates and credits
Note my remarks on rebates vs. credits.
Last I looked AZ had nothing.
However, adjacent states have some pretty good incentives.
From that list, I would film in Oklahoma as long as I was spending over $50K.
I don't know about Oklahoma, but some states don't accept nearly everything in the expenses.
Some states I believe only accept below the line expenses, and even from those not everything.
Louisiana is a popular state to film in, because they accept above and below the line, so even if you pay your star a million dollar salary, you get the 30%.