How To Go Pro with Photography – Start-Up Business and Tax Considerations

How To Go Pro with Photography – Start-Up Business and Tax Considerations

You’re Ready

For several years, you’ve been taking pictures.  Your images have varied from your kid’s soccer games, fireworks on the Fourth of July, sunflowers in the backyard, and your cousin’s wedding across the country.   With each year, your work has kept improving, to the point that everyone that now views your images tells you that you should be selling your work.  After much deliberation, you finally agree to take that plunge.

Now What?

Whether you decide to quit your day job and go full force with photography, or just test the waters at first with some side work here and there, you need to get some matters straightened out before you take on that first paid gig.  Most States (and potentially counties, cities, towns, etc.) require all businesses to register with the State that you will be doing business.

Depending on the legal entity you choose, some registrations are more complicated than others.  Choosing a corporation as your legal entity will require you to first draw up your “Articles of Incorporation” and file them with the State.  Limited Liability Companies (LLC) have been very popular in recent years, since they are easily set up by creating “Articles of Organization” which usually just state the business purpose and the officers of the company.  Another advantage of an LLC is for tax purposes, as the profits or losses pass through to the owner(s) and therefore, the LLC itself does not pay any income tax.  Even if you decide to not form a corporation or LLC, you will probably still need to register your business name (i.e. Susan Smith Photography) or DBA with the State.

Tax Implications

When most people hear “tax implications”, they think of income tax right away.  And, income tax implications certainly need to be considered.  However, sales taxes are another area that require your attention if you’re going to be charging for your work.  State laws vary on what is considered taxable for sales tax purposes.  Some states only tax tangible products that are sold, such as prints or discs that contain images.  Other states, like Florida, also tax services, such as your sitting fee, or consultation fee with a client.  Be sure to research this very carefully, or speak with your accountant on this issue.  Even if you incorrectly didn’t charge a client sales tax when you should have, the government will not care, and will come after you for the missing tax dollars.

Like registering your business name, you must also register your business in order to charge, collect, and remit sales tax.  Most states have very good websites that can walk you through the necessary steps to take, to ensure that you register correctly, charge the correct amount, and file timely returns, along with remitting the collected funds to the state.

Other Considerations

You’ll want to organize your revenue and expenses from the start.  Choosing the right accounting software for photographers is very important.

Conclusion

Well, what are you waiting for?  It’s time to start earning what you’re worth.  Those lenses and other accessories aren’t cheap!

3 Comments

  1. Great post! What bookkeeping/accounting software do you recommend for photographers who are just starting out? Or is it even necessary? Thank you

    • Thank you Tampa Web Design!

      For photographers just starting out, a simple spreadsheet program, like Excel, may be enough to keep track of revenues and expenses. As the business grows, it may be worthwhile to switch to a lower end accounting software program, such as QuickBooks, that will greatly enhance the business’s ability to track revenue and expenses. Hope that helps!

  2. These are the best photos I have ever seen!! Love the look!

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