Supporting my Hobby?

[sonshine_rae]

Is there anything wrong,
with wanting to do some small time jobs.. in studio or outdoors (I'm mainly talking people portraits), to try and 'support my hobby.'

Aka .. I'm not looking to make a huge profitable business, all I'm looking to do is 1. have fun, 2. serve others 3. try to fund my insatiable desire for more equipment lol.

I was wanting to call this idea a business at first, but now from what little research I've done.. I fear that could lead to problems, especially if I have a name other then my own for it?? I'm not looking to get into lots of tax and legal situations.

I'm just guessing here.. but probably I would see anywhere from 1 client a month to 1 client a week..... I doubt I'd be very busy.

What's the best way to handle this type of situation? I do have people interested in my photography particularly for their children.

I also do plan on using adult/child model releases whenever I do a shoot.

I guess what I'm mainly concerned about is whether or not I need to fuss with/be concerned about getting a business license or other such technical stuff.


Is advertisement by word of mouth/business cards/coupons and a portfolio without a license going to be a problem?


We're talking 'at most' I'd be a weekend warrior ..... my main focus at this time in my life is my family (I'm a SAHM) we don't 'need' me to work.. nor do I desire to. This is my HOBBY.. it's just a obviously expensive, fun, addictive hobby.. that's all lol.

Hopefully I didn't ramble too much, nor repeat to many other threads, honestly I am searching and reading other threads. But there are so many threads with sooo many variables I thought I'd try to get specific advice for my situation.

Thanks for any/all responses.
~Rae~

ETA: I thought I should clarify.. since I know some people get their feathers ruffled about this sort of thing, I'm definitely not expecting or even trying to compete with the local Professional Photographers... people who want that high a quality and are willing to pay for it are still going to go to those guys. If anything I'd be competing with the local in-store studios (aka wal-mart, target etc), which won't be significantly bothered by my interference, and I should be able to give a similar quality with a more personal/better customer service.

[S.Horton]

Take the business, if you don't do much of it, then it is just a hobby.

Declare the income when you file your taxes, no other technical thing is required.

[sonshine_rae]

Thanks Sam,

Am I correct in my understanding.. though that I can't take on a business name apart from my personal name without running into legality issues?

I guess to be perfectly clear I'm asking, can I be 'RG Photography' .. or do I need to do something like 'Photography by Rae ********' (last name). From what I read on the boards, most people were recommending to only use your personal name if you don't have all the legal paperwork for a business??

More replies are certainly welcome.

[S.Horton]

If you are in the USA, *if* you have a bank account for the business or you start advertising, then you would be wise to file a form for a fictitious name.

If you'll do small, zero-risk stuff, it isn't needed at all.

In PA, that's this form:
http://www.dos.state.pa.us/corps/cwp/view.asp?a=1093&q=431168

[chris_m_atl]

If any one of your clients pays you more than $500 for your services throughout the year; you'll have to fill out a 1099 Form as a subcontractor. If you do not have a business license and EIN Taxable ID number, you'll have to use your social security number for claiming the taxes as well as filling out that form. Your client/employer would then file the form with their taxes. Basically, do you want each of your clients to have your Social Security number? If they pay you $500+ in services...that's what will happen. At least in Georgia....

Getting my business license cost $80 at the local courthouse. I also registered my Business name there (can't remember the cost for that but wasn't more than $30 or so). I got the Tax ID number by filling out the form via the link below. The IRS mailed my EIN number within a couple weeks as well as supplied the number online after filling out that form. With these two pieces of paper, I can open a Business account at the bank and provide the EIN number when I need to fill out a 1099 to clients. This process, as I've been told, is the easiest way to get your Business name official; and more importantly, legal.
https://sa2.www4.irs.gov/sa_vign/newFormSS4.do

[liza]

Probably the best thing to do is to go to the www.irs.gov website and peruse the small business section. That will give you information about filing Schedule C, which is for sole proprietors, and about self employment taxes. Then go to your department of revenue for your particular state and check out the regs there for sales tax. My state has links to the SBA, which I found very helpful. You'll have to check with your municipality about registering your business with the local county clerk's office.

[Padawan Dad]

I just file a schedule C every year. However, I just moved to Massachusetts from New Hampshire. In NH, I didn't need a license. And I just used my name as the business title. My accountant is currently helping me set-up in Taxachusetts... I mean Massachusetts. I just got here about a month and a half ago.

[laurielozano]

If you are just 'Supporting a hobby' and the income you generate is to purchase more 'toys', then you dont need to do anything. People pay you for your service and you put it in your personal checking account. You do need to keep accurate records of what you've been paid (write out sales receipts [keep a copy for yourself and one for the customer] and what you spent on new equipment [keep all your sales receipts/proofs of purchas]. Then at the end of the year file a Schedule C to list your profit and losses. If you made more money than you spent on equipment then its considered a business. You do not need a tax ID number nor do you give your clients your SS#. You just file the Schedule C and pay 30.3% of everything your earned for income tax & SS benefits.
If you SPEND more on new equipment for the hobby than you brought in with sales, then its considered a hobby because your loss outweighs your profit. You still have to file a Schedule C to prove this, though.

If you want to turn it into a for-profit business and keep the income/expenses separate from your personal checking account, and you do not want to use your name, then you go to your courthouse and file a DBA [fictitious name, doing busines as] form, for about $20. Then you open a business checking account under that name. That is the name to which the customers will make their checks out to. Keep the sales/expense records as mentioned above and file a schedule c at the end of the year.

If you get paid more than $500 then you have to file the schedule C. If you get paid less then $500 you simply pocket the money and do nothing.

[tmanAg08]

If you get paid more than $500 then you have to file the schedule C. If you get paid less then $500 you simply pocket the money and do nothing.



Is that per client, per year, or per client per year?

[laurielozano]

It is not per client. Its per calendar year. I.E. in 2007 you earn more than $500 regardless of the number of clients, then you have to file a schedule C. The IRS could care less how many clients pay you, all they are interested in is the amount you were paid total. So if you have 1 client pay you $800, you have to file a schedule C. If you have 20 clients and only get paid $450 total from all their orders combined, then you dont have to do anything.

[sonshine_rae]

Thank you all, this has been a great help..

Hope it is of benefit to others as well :)!

[ChatKat]

Okay, soapbox time...why are you getting tax information (incorrect at that!) from photographers? Hobby income is taxable and hobby expenses are not deductible. Go see an accountant who can look at your particular situation and keep you out of IRS Trouble. Some might even meet with you gratis for the chance to have your business. One szize does not fit all! You wouldn't pull your tooth - you'd go to see a dentist. Why are you going to photographers for tax advice?

Your friendly neighborhood tax accountant/photographer