interview by David Walker

CPA Robyn Cohn has run an independent tax practice in New York City since 1991. She serves a diverse base of clients, including photographers, throughout the US.

PDN: Incomes are down for a lot of photographers because of the economy. Are there strategies for using a loss of income to your advantage?
Robyn Cohn: Yes. If you have a negative income, and it's a loss based on certain parameters, a new law allows you to carry that loss back over the prior five years. In other words, a loss this year can create a refund on taxes you paid in the last five years. The new law also applies retroactively to 2008, so anyone who had a loss in 2008 should try to amend their (2008) tax forms to take advantage of it and get a refund. That's the biggest new thing affecting people who have had a loss of income. The carry-back used to be limited to two years.

PDN: Is it difficult to amend your tax forms to take advantage of it?
R.C.: It's very easy for an accountant to do, but it's probably mind-boggling for most people. Call an accountant, tell them you have a loss and would like to amend your tax forms, and ask what the fee would be. If your filing status has been fairly stable for the last five years, the accountant can go over some rough figures with you over the phone to determine whether your tax forms would be worth amending.

PDN: If you have a low income in 2009, are there other tax rules you can take advantage of?
R.C.: There's one called the Retirement Savings Credit. The issue is, if you have a bad year, you don't have money to put into a retirement account. But the credit encourages you to switch other savings to retirement savings. So if you're married and your income this year is under $53,000, or single and earn below $26,500, the Retirement Savings Credit provides you with a tax credit that ranges from 10 percent to 50 percent of every dollar you put into an IRA or a Roth IRA. If your income is anywhere near those numbers, you should look into the credit.
Another consideration is un-reimbursed medical expenses. There's a general limitation on that deduction that is based on income. If your income is going down, it makes more sense to keep track of un-reimbursed medical expenses, because you may get a tax benefit that you never get when your income is higher.
Another new rule implemented in 2009 is that the first $2,400 of unemployment insurance you get is tax-free.

PDN: Let's say your having an OK year. Are there any changes in tax law that can help you, or that you need to pay particular attention to?

(PDN subscribers can click here to access part 2 of this interview)