-
OT: Need advice on budget for tax write off
-
[David Roth Weiss] “Rates vary all over the country and by experience and equipment, so no one can give you exact amounts. However, a day rate between $350 to $550 seems about right for a person who has has not yet established themselves.”
Well, that’s a start. At least it’s a helpful post. When you say day rate, how many hours would you include in that rate? I’m trying to determine what would be a proper hourly rate for a beginner.
-
[Sebastian Alvarez] “That’s what I would call really twisting my intentions for posting.”
Really?
[Sebastian Alvarez] “I recently worked on a video project for the non-profit organization I work for, however this project was not part of my daily job for them, but something on the side that I decided to donate because of the way the economy is in right now and the fact that money is more than tight in our local chapter. I will, however, make sure to write this off in my taxes come February,”
Seems like you are asking to write it off to me. Just to prove what a prick I really am, go to this link:
https://www.irs.gov/pub/irs-pdf/p526.pdf
“Not Deductible As Charitable Contributions…
(SNIP)
…Value of your time or services”
Now you can continue to argue with me all day, I don’t really care. But when it comes your turn to argue with the IRS, remember this prick warned you for your own good.
Terence Curren
http://www.alphadogs.tv
http://www.digitalservicestation.com
Burbank,Ca -
Whatever, dude. Even if what you say is the way it is, you’re a prick for being offensive towards someone who simply asked how much to value his services because he doesn’t have the experience to do so. I don’t even care to waste time responding to your rude comments anymore, and I’m glad I do not work with you or know you personally.
-
You’re welcome. 🙂
Terence Curren
http://www.alphadogs.tv
http://www.digitalservicestation.com
Burbank,Ca -
Being rude to people who are trying to help you is a strange approach, even when you don’t like what you read.
But for me a day is 8 hours. For some it is 10 hours. I’d guess David’s suggestion used a number somewhere in that range. Choose your own preference, but no doubt you are aware that if you give an open-ended “day rate” there are those around who will take that as licence to use you for 12, 16, 18 hours.
A proper (day or hourly) rate is what someone will agree to pay (you).
A corporation will often agree to a higher rate that a non-profit – and expect speedier performance, better service and higher finished standards.
As a beginner, an hourly rate is tricky concept: as you are learning on the job, what proportion of your hours spent are truly and fairly chargeable? Would you pay a carpenter to learn how to perform his (her) trade, on your time? You’ll want to balance out an appropriate “pro” rate with the extra time you are spending – or your client will want to.
The hours approach can be misleading in another way, too – is the value (or price) of an object defined by the nature of final object, or the many (or few) hours taken to create it ..?
Or more directly, if one person takes 2 days to edit 2 hours of material into a polished 5 minutes, and another person takes 30 days to do the same thing, can the person who takes longer expect to charge more and keep customers coming back?
-
Finally we’re getting to something productive, so thank you Mike, and also David. Mike, I’m not rude to people trying to help me, in any case Terence was rude and twisting my post, so I had to address that. I don’t have a problem with any of the other posters in this thread, and I appreciate your advice.
You bring some interesting points.
[Mike Smith] “As a beginner, an hourly rate is tricky concept: as you are learning on the job, what proportion of your hours spent are truly and fairly chargeable? Would you pay a carpenter to learn how to perform his (her) trade, on your time? You’ll want to balance out an appropriate “pro” rate with the extra time you are spending – or your client will want to.Or more directly, if one person takes 2 days to edit 2 hours of material into a polished 5 minutes, and another person takes 30 days to do the same thing, can the person who takes longer expect to charge more and keep customers coming back?”
I suppose that, as in any other business, you start by charging less than others in part because you’re not among the best or fastest in your trade. Of course if it takes a person 30 days to do what a highly experienced person does in 2 days I think probably that person is not in the right profession. But yes, let’s say what took me about 50 hours, an experienced videographer could’ve done in 40, but the experienced one would’ve charged so much more either per hour or for the full project that in the end the customer would’ve paid a lot less for my work, if it would have been a paid job and not a donation.
One question that arises from this is, what happens when instead of charging the customer an hourly rate you mutually agree to set up a price up front, then you request either one third or half of the payment up front, but then the customer changes or adds new content to the project, or changes their mind about what has to be included and what not? How does that work exactly if you already set up a price for the whole project? Does it have to show somewhere in the contract that if the customer introduces changes that will cause an increase in either videotaping or editing time, then he will have to pay more? I would think this is pretty obvious, but I would like to know how it works in the real world.
Thanks
-
[Sebastian Alvarez] “One question that arises from this is, what happens when instead of charging the customer an hourly rate you mutually agree to set up a price up front, then you request either one third or half of the payment up front, but then the customer changes or adds new content to the project, or changes their mind about what has to be included and what not? “
It is a good idea to put in the original contract a set number of revisions. Depending upon how many layers of approval there are in the company you are dealing with, this could be one revision or five. The more detailed your contract about exactly what you are agreeing to deliver, the better. Even down to quantities of elements and additional costs for more.
Terence Curren
http://www.alphadogs.tv
http://www.digitalservicestation.com
Burbank,Ca -
At the risk of scratching open a healing wound, I can think of one area where he might be able to ‘write off’ the hours, though not necesarily in IRS terms; If it was donated to a political campaign or organization under the heading, “In-Kind Contribution”.
Now, the rules are different in every state, but when you make a campaign donation in Illinois, it is recorded and reported as public information if it is worth more than a certain base amount. The contribution can be in cash or check, or stocks, etc. or it can be physical things and services, like rental of an office and office furniture, computers, software donations, printing jobs for banners and flyers and mailers, building a parade float, and yes, making videos.
This came up in the last campaign when it was discovered John Edwards was basically hiding a “fee for services” by paying his mistress a salary to make campaign videos for the internet, at what appeared to critics to be highly inflated rates compared to the final product. Not trying to make any political point, just showing that donating your time and skill to make a video for a political organization can be given a cash equivalent value. Ask an accoutant if that kind of “contribution” is deductable. For you, I’m guessing not, for the organization, maybe?
-
[Mark Suszko] “At the risk of scratching open a healing wound, I can think of one area where he might be able to ‘write off’ the hours, though not necesarily in IRS terms; If it was donated to a political campaign or organization under the heading, “In-Kind Contribution”.”
That’s the term my organization used for it, and I think that’s what it says on the form they gave me. Today I’m home sick, but hopefully tomorrow I will go back and get the form and see.
-
Fixed fee or time rate?
Customers, suppliers and projects split on the fixed fee or time rate issue. I regard it as a negotiation issue, project by project, where the “best” outcome is one where everyone is happy enough with the price, the schedule, the quality, and the final project (and the payment schedule).
For suppliers, time rate can look attractive: whatever you do, you can bill for. Camera crews, sound recordists, edit facility houses often go exclusively this way, and some script writers and graphic designers too.
For professional buyers, this is not scary. If you freelance with professional production companies, this is often a good route – everybody knows more or less what’s what, and nobody ends up feeling cheated. Of course, the person paying the bill is going to want to be fairly sure that they are getting good value and output for time.
Less regular buyers, though, and those seeking to hire a producer rather than a technician, an all-in fee looks much more attractive – the buyer can ask for a good description of the project, agree quality and schedule, and have a pretty good idea of what they’ll get and what it will cost.
For producers, too, this can be good: negotiate a decent rate, and retain the flexibility to use resources wherever seems best for the specific needs of the project. There will always be unanticipated expenses on almost any project, so budget as accurately as you can on an agreed specification, and allow a “contingency” for yourself – an amount of over-run you expect. Then you can plan as you see fit, and absorb small departures without stressing your client by going back for more money.
A stressed client is bad – less likely to return, less likely to pay promptly, less likely to recommend you.
But you do need to be really clear up front about what’s being offered, and then manage the project and deliver just that. As producer, pretty well all decisions on the production will fall to you – take charge and act like a producer. A busy client will be pleased. I invite the customer to review and sign off on script or project outline, on first edit (offline, from the old days) – they only get one – and final edit, or online – again, they only get one. Changes requested at offline can appear in the online: changes after the online will normally incur extra costs (unless it was a goof from my side).
Changes in project definition once the project’s started – it’s going to happen. If it’s possible to reorganise on the new spec without extra costs, then that’s the way to go (in my opinion). But if changes are going to stress the budget, point that out right away, and if necessary back that up with a speedy written quote for the extra costs . It’s perhaps not surprising that potential changes swiftly sort into “essentials” – quite rare, and usually readily paid for, even if by trimming other parts of a project to keep costs down – and “whims and luxuries”, not wanted if they are to cost more.
Either approach works – and with a bad customer (or bad supplier) either can go sour. If (you or) your client’s main motivation is to take advantage of the other party and get something for nothing or as little as possible, this is a client (or supplier) to avoid.
You need to be trying to “read” your negotiating partner up front – and work out a deal that gives you both what you want – good work at a price you can both live with. There a plenty of people out there it is better to turn away. The ones that want great value and quality but will cut you a fair deal (and pay on time) deserve your very best attention: you want them as regulars.
Reply to this Discussion! Login or Sign Up