Questions on the business end of photography
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Old 03-15-2008   #1
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Default Questions on the business end of photography

I did my first remotely serious bit of research into how to go about getting into the business. I have to admit that I was a bit overwhelmed with the myriad of issues that come into play.

In my mind's eye, my foray into the world of making money from my photography is small in scale and would hopefully avoid many of the complexities by staynig in the "hobby" arena. Consequently, any "income" would theoretically only be reported on the Schedule C of my personal taxes. However, I am concerned about liability and the lack of apparent protection this status affords. I am also concerned I may have a naive view of how this will work.

My questions to any who read this post:


From a tax perspective, are you engaged in photography as a "hobby" type of business?
Has this status been more or less beneficial to you, in your own mind?

If in a "hobby" status, how did you go about financing your hobby/business?


If doing this is a "hobby" did you consult with a CPA and/or attorney? Was this useful for you?

Thanks for taking the time to answer, its appreciated.

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Old 03-15-2008   #2
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Default Re: Questions on the business end of photography

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Originally Posted by NewShooter View Post
From a tax perspective, are you engaged in photography as a "hobby" type of business?
Yes. It's part time income for me.

Quote:
Has this status been more or less beneficial to you, in your own mind?
So far, since I make considerably more in my "real" job.

Quote:
If in a "hobby" status, how did you go about financing your hobby/business?
Initially, self-financed. It's somewhat self-supporting at this point but hasn't even come close to recovering capital costs. In other words, I'm paying my current expenses but not my original equipment prior to starting.


Quote:
If doing this is a "hobby" did you consult with a CPA and/or attorney? Was this useful for you?
You bet I did. CPA first, got some recommendations, then an insurance agent and (briefly) an attorney to double check my approach. It's possible (and cheaper) to do this without all of the hassle but if you have any assets or outside income, it will hurt more than just covering your photography business if something happens. They go after EVERYTHING.
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Old 03-18-2008   #3
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Default Re: Questions on the business end of photography

umm, i can make some pros out there upset, but what is the advantage of actually claiming this income? kind of like tips in a restaurant.
as for financing, i bought it(loan from the bank), then paid for it, then saved some up now just pay for it when i can.
uh, why would you need to consult a lawyer or cpa? i would think if you are making a living at it or making 20k-30k you might need some help but for as little as you start out why bother. as for the lawyer what would they be able to offer.
I hope more people chime in on this subject, as you can see i feel i like i have the same questions just from a different angle.
i dont mean to be negative to being "legit" but truly curious as to the benefits if you are staying at the hobby level.
look forward to seeing some posts.
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Old 03-18-2008   #4
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Default Re: Questions on the business end of photography

Quote:
but what is the advantage of actually claiming this income?
Its the law.
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Old 03-18-2008   #5
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Default Re: Questions on the business end of photography

Yeah, I agree. The $ I may or may not make doing this on the side is absolutely not worth the risk of getting sidways with the IRS, especially when you consider that as a "hobbyist" I can just claim the income on my normal taxes as additionnal income. The only real headache then is how to account for the sales tax for the state. I'm not sure if as a hobbyist I have to worry about that or not, that' s why I think I need to talk to a CPA and lawyer. Also, there any number of landmines in my way that I'm not even aware of that a simple meeting with a CPA and attorney that I think will help to avoid.

Any other folks out there willing to share their experience?
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Old 03-18-2008   #6
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Default Re: Questions on the business end of photography

I was wondering along these same lines. In addition, how does one account for taxes on " resold" items, such as prints, albums and the like. do you pay tax based on your profit only or what? As for getting sideways with the "man", PUHLEEZ, i'd rather not and unless you are making a boatload of money, in which case, you'd definitely have an accountant, as NewShooter said, it's probably not worth the risk for change anyhow.

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Old 03-18-2008   #7
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Default Re: Questions on the business end of photography

umm, good point jfrancho
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Old 03-18-2008   #8
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Default Re: Questions on the business end of photography

Look at it this way, a business hires you to do a shoot for a publication on their website. They write this off as a business expense. You provided an invoice and and a receipt of payment, and they probably provided you with a purchase order. There is a pile of paperwork documenting this transaction, and failure to comply with tax laws, even if you owe no taxes on the transaction is not going to look if one party gets scrutinized by the IRS. I don't know the details of the tax laws, but my accountant certainly does.

The same goes for that contract that you had that company sign. The verbiage in that, the way you invoice them, and provide receipt of payment is something your lawyer can help you with. And should you run into trouble, you have that lawyer to rely on to represent you.

I am neither an accountant nor a lawyer, and that's why I have them on my "payroll" despite my "hobby" status.
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Old 03-18-2008   #9
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Default Re: Questions on the business end of photography

jfrancho you mind if I ask how you approach the liability issue? Do you have insurance or membership in any pro photo organization that provides the insurance as part of that membership?
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Old 03-18-2008   #10
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Default Re: Questions on the business end of photography

My equipment is insured through a rider on my homeowners'. No membership. All my customers come through personal referrals. Its a hobby, and for now it can stay that way. Since I own a house, have run my own single proprietorship business, and have been through a divorce, lawyers and accountants have been an important tool.


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