Tax Credits - US Federal

http://www.filmsf.org/index.aspx?page=47
In October of 2008 Congress passed an extension of IRC Section 181 in order to combat runaway film and television production. This tax code allows for qualifying productions to immediately write off up to $15 million for tax purposes.

Remember not to include the tax credit in your film budget.

Check QuickFilmBudget.com for a sample film budget.

Buy or Rent - Camera

The Camera Package is usually a large line item in your film budget. Motion Picture Cameras are one of the few items in a film production that can be reused. Obviously, food cannot be reused. Film stock cannot be reused and unused film stock has a ticking shelf life. But cameras can be used and reused no matter what kind of story is written or actors are cast. A way to amortize the cost of a camera package is to use it for multiple films. There are several questions you must ask yourself before you make the decision to buy or rent a camera.

1) How many films do you realistically expect to make?
If you only plan to film two films over the next decade, it will not make sense to buy a camera because it would be less expensive to rent a camera.
2) In what time frame?
Digital camera technology is constantly changing. If there is too much of a time lag between films, your digital camera may become obsolete. If you buy a motion picture film camera, it will cost you to maintain the camera. You can rent out the camera when you are not using it but you run the risk of it being damaged or not being available when you need it.
3) Do you plan to use digital tapes or film stock?
Film stock is much more expensive than digital tapes. Also, the cost to develop film and create the film elements is much more expensive than a DI. Be careful that your story will not be hurt by using digital cameras since some natural elements like light, fire, and water sometimes distorts on digital tapes.

Check QuickFilmBudget.com for a sample film budget.

Production Food

Craft service refers to the catering done for the cast, crew, and extras working for film and television production companies. A craft service table is a table of snacks set up either on set or on location. Cast, crew, and extras choose snacks and beverages from the table buffet-style.

Full meals are not usually provided on set as there are often many restaurants in the area and studios have at least a coffee shop. The lunch break is typically an hour, unlike the half hour usually given for on location shoots. Situation comedies, or sitcoms, do typically provide catered hot meals once a week, on live taping days. The cast, crew, and extras eat a few hours before the show starts taping.

Craft service items vary widely depending on the production firm's film budget. Most craft service tables include a mixture of 'junk' food such as chips and doughnuts as well as sandwiches, fruit or vegetable platters, cheeses, muffins, and pretzels or microwave popcorn. Usually hot water is available to prepare instant soup and hot chocolate mixes as well as tea. Most craft service areas include urns of coffee as well as sodas and juices. Breakfast craft service offerings usually include fare such as bagels, toast, muffins, cereal, peanut butter and jelly, juices, and coffee.

Sometimes catering trucks are used for bigger productions with a lot of extras. The extras may or may not get sandwiches from a craft service table while the cast and crew receive hot meals. Screen Actors Guild (SAG) members wait in line before other extras, and cast and crew wait ahead of all extras. This is not purely a matter of ranking order, but also scene scheduling. Extras, unlike the cast, and especially the crew, are not needed on set all of the time.

Check QuickFilmBudget.com for a sample film budget.

Legal Structure

When you make a movie, you are also starting a new business. Every business needs a legal structure, films are no different. The options are LLC, LP, Corp. Sometimes you may even create all three for one film.

Here is one legal structure that is sometimes used: form a Limited Partnership with a Corporation as the managing partner. This protects your investors, who are Limited Partners, and you, who act as the managing partner through your corporation.

A good lawyer may be expensive, but they may also save you money in your film budget in the long run.

Check QuickFilmBudget.com for a sample film budget.

Film Insurance

Feature film insurance is a unique type of insurance where practically all aspects of production are covered – from film negatives to the unstable actors who frequent rehab. The careers of insurance agents too segue into a film’s production. When shooting starts, they often become detectives, human resource managers, and location checkers.

Fireman's Fund, the biggest insurance provider of Hollywood films, sent out people to check to the shooting location of "Into The Wild" to check if any of the film’s staff could be airlifted to a hospital. Fireman's also went to the overseas shooting locations of "Bourne Ultimatum", making sure that the film used in the shooting the feature film didn’t get destroyed by x-ray machines at the airport. At the Chubb Group, another insurance provider, agents read scripts to check if there are any scenes that would require actors to be in proximity of any explosion.

Feature Films insurance can take up to 2% of a film budget.

Check QuickFilmBudget.com for a sample film budget.

Producing for a Studio- Tip# 3

When you are looking for a project or script to sell to a studio, there are only two financial aspects to keep in mind.
1. Studios do not want to hear a script described as "low budget". In general studios think low budget means low production value. Audiences want their money's worth at the theaters. So they want to see something that they don't think they could have filmed on their HD camera with some friends over the weekend. Readers may point out the obvious successes like "Paranormal Activity" and "Napolean Dynamite" but you have to remember that they were not produced by a studio but rather acquired as a finished film by a studio.
2. Studios like hearing that a story takes place or can be shot in a state with an attractive tax credit, like New Mexico or Louisiana. These states can offer as much as 35% back on money spent there. Remember that such tax credits do not show on your film budget.

Visit QuickFilmBudget.com for a sample film budget.

Producing for a Studio- Tip# 2

An important thing to remember when you produce films for a studio is to remember who is really running the show. Is the director the driving force behind the film? Is there an "800 pound gorilla" producer who is really running the show and you are there for the ride? Does an actor hold all of the cards? A quick way to find out who is running the show is to check the film budget to see who is getting paid the most or on passion project who is getting paid well below their quote. Since you are already a credited producer with a salary, you don't need to fight for power on the set. Every person on the film has been assigned a role. Some roles have already been accomplished (like the literary manager who packaged the script with a hot director). If you have already done your part, then enjoy the ride.

Check out QuickFilmBudget.com for a sample film budget.