Every purchase has a class, and they are not all the same
Capital cost allowance is a schedule, not a receipt pile. Camera bodies, lenses, lighting and grip land in Class 8 at 20% declining balance. The edit workstation runs much faster, in Class 50 at 55%, and standalone application software sits in Class 12 at 100%. Drones are the trap: the CRA has taken the position that a drone is an aircraft, which puts it in Class 9 at 25% rather than in Class 8 with the rest of the kit. The half-year rule trims the first-year claim on most of it, and nothing is claimable until the gear is available for use.
| Purchase | Class | Rate |
|---|---|---|
| Bodies, lenses, lighting, grip | Class 8 | 20% declining balance |
| Drone (CRA position: an aircraft) | Class 9 | 25% declining balance |
| Edit workstation and monitors | Class 50 | 55% declining balance |
| Purchased application software | Class 12 | 100%, half-year rule applies |
| Vehicle used for shoots | Class 10 | 30%, with a cost ceiling for passenger vehicles |
Timing is the planning lever: a body delivered and in use in late December starts its claim a full year earlier than the same body bought in January. We map the gear wishlist against the year's expected profit before you order, which is what Tax Planning & Advisory exists to do.
Selling and trading gear: the pool does the math
Photographers churn bodies, and the tax result lives in the pool mechanics. Selling used gear does not create income on its own; the proceeds reduce the undepreciated capital cost of the class. The bill arrives only when a class goes negative, which triggers recapture of the depreciation you claimed, and a terminal loss is available only when the class is emptied entirely. A trade-in counts as proceeds too, even when the invoice nets it against the new body.
The practical habit is unglamorous: keep a gear register with what each item cost and what it fetched, including private sales through the used market, because a class balance built from guesses fails the first CRA question. We maintain that register as part of the plan, so upgrade decisions come with their tax effect attached.
Insurance belongs in the same conversation. Premiums on the gear policy are deductible, but a payout for a stolen bag or a drowned body is proceeds of disposition, and a large cheque against a small class balance can trigger recapture in the very year you are re-equipping. Planning the claim and the replacement purchases into the same tax year usually softens the hit, which is another reason the decision happens before year-end, not after.
December deposits for July weddings should not be taxed twice over
A strong booking winter stacks retainers into a year whose weddings have not happened. Where those amounts have been included in income, paragraph 20(1)(m) of the Income Tax Act allows a reserve for services not yet rendered, deferring the tax to the year you actually shoot. Genuinely refundable deposits are not income at all until your contract says otherwise. Which treatment applies turns on the same contract wording that drives the HST timing on our tax services page, so we align the clause, the books and both returns once, then reuse the answer every season.
Pay yourself around the season, not against it
Photo income is lumpy: engagement-season retainers, a summer of balances, a quiet late winter. Unincorporated, the planning is about instalments that match the curve instead of starving the slow months, and about RRSP contributions sized while there is still cash to fund them. Incorporated, the salary and dividend mix does the smoothing: salary creates RRSP room and steady personal cash through the trough, while dividends flex with the season's results, and profit left inside the company waits at Ontario's roughly 12.2% small-business rate instead of a personal marginal rate.
Whether the corporation should exist at all is its own decision, with its own page. For studios already incorporated, we set the mix each fall, before the year hardens into a filing, so the plan and the corporate tax return tell the same story. That conversation happens at our Mississauga office or on a call, and it starts with a free 15-minute discovery chat rather than a retainer of our own.
