thinkin of registering

[Fabian9931]

Hello I have a couple of questions. I believe im not that busy in photography to go and fully open and register my photography as a business. But If i did. after I am registered and done, I would like to know what i need to pay. For example this is what i think, I am probably wrong and thats why i am posting...
I live in NJ so i believe i need business insurance, have to charge sales tax and pay sales tax, anything else? as far as have to pay? sorry if this sounds like a noobie question

[Dennis_Hammer]

Income Tax and Personal Property tax on all your equipment.

[Jon Foster]

Your local township, city or county probably offers one or two small business classes. They are usually pretty cheap like $30.00 and well worth the time. Around here you can take them in the afternoon or evening. They will pretty much outline what you need to know when starting up a small business.

Get a copy of Quickbooks or another popular accounting program to do quoting, invoicing, assets and all your GL work. That way when it's tax time you can give your accountant a copy of the data file so he/she can make sure everything is in order.

Jon.

[Fabian9931]

Ok thanks for the replies. sounds good

[MJPhotos24]

Well, this is just local and changes from area to area so take it for what it's worth...

- DBA ($35) to open a bank account, checks ($60) for said bank account
- Lawyer to register your business ($400+)
- Taxes on all sales (most people include this in there pricing so not to assess it afterwards)
- Self-employment taxes
- Insurance (gear, studio, liability)
- accountant

...in the two businesses I'm involved in we also paid for...
- website hosting (both sales site and regular site plus 2 urls)
- logo designer (few hundred)
- obviously supplies for packaging, etc.

I know I'm forgetting some stuff...

[Fabian9931]

Well, this is just local and changes from area to area so take it for what it's worth...

- DBA ($35) to open a bank account, checks ($60) for said bank account
- Lawyer to register your business ($400+)
- Taxes on all sales (most people include this in there pricing so not to assess it afterwards)
- Self-employment taxes
- Insurance (gear, studio, liability)
- accountant

...in the two businesses I'm involved in we also paid for...
- website hosting (both sales site and regular site plus 2 urls)
- logo designer (few hundred)
- obviously supplies for packaging, etc.

I know I'm forgetting some stuff...

thanks for the detail. but as for as to register my business i will be usuing incitnow.com which does everything for me and in 2 days i get my doc's and its about 300. and web design i do myself which would be part of my business as well and the logo i designed too. but I have a question tho. I was talking to the owner of my full time job right now and he says. You don't have to have insurance to register a business. is this true? He says you can run a business without insurance, which im sure is right but not the best idea. but doesn't that limit you from certain commercial jobs? like if bloomingdales required me to have insurance then i wouldn't be able to do that job. but he says that if thats the case then you get the requirements from your client (bloomingdales) and then you go get insurance if you like to... I want to do things right so therefore i will be getting insurance but just had that question. thanks!

[Peacefield]

I live in NJ and just registered my business this past month. Don't know everything about everything, but I'll tell you what I know and did.

I set myself up as an LLC. You can pay a lawyer to do this, but the reality is that it's pretty simple, can all be done on line, and it's pretty inexpensive. Go to the state's website:
http://www.nj.gov/njbusiness/

The form is on line and the cost was only $125 charged to a credit card. You will then be prompted through the additional steps to register with the state to collect sales tax and among a few other registrations, all pretty simple and at no further cost.

You do not need insurance to register your business. You do need insurance to protect yourself. I have State Farm for my home and auto and called them. $1 million liability, $10k on my equipment, and $5k for medical at only $180/year. I want to double my liability and add an errors and omissions clause but haven't yet gotten a quote for that. And you are right about commercial work. I'm a procurement director by day and would require a certificate of insurance from a photographer before hiring them. And your friend is also right that you can get insurance very quickly so no need to purchase it before it becomes necessary.

Good luck.

[amfoto1]

You know, every city, county and state is going to be different on this.

Online advice is pretty iffy. Best to get everything right to begin with. Due to bad information that he followed, a sales tax issue alone cost a friend of mine $600,000 and nearly lost him his three photo studios.

Don't trust government employees to provide you correct info, either. They have no stake in whether or not what they tell you gets you in hot water. I got burned, although not too badly, following info from local business license employees.

An hour with a local CPA and another brief consultation with a local business attorney may be the best money you ever invest in your business.

[tracknut]

Hello I have a couple of questions. I believe im not that busy in photography to go and fully open and register my photography as a business. But If i did. after I am registered and done, I would like to know what i need to pay. For example this is what i think, I am probably wrong and thats why i am posting...
I live in NJ so i believe i need business insurance, have to charge sales tax and pay sales tax, anything else? as far as have to pay? sorry if this sounds like a noobie question

Consult your CPA of course, but as far as I can tell, you need to address all those (insurance, sales tax, income tax, etc) whether your "register your photography business" or not. Ie, if you make money now, you need to pay income tax on it, and if you make money once you're formed a business, you still need to pay income tax on it.

There are some new things that come with forming a business, like paying for the business license and possibly a DBA, but most of the work & cost you describe is not "new" with the business.

Dave

[Fabian9931]

I live in NJ and just registered my business this past month. Don't know everything about everything, but I'll tell you what I know and did.

I set myself up as an LLC. You can pay a lawyer to do this, but the reality is that it's pretty simple, can all be done on line, and it's pretty inexpensive. Go to the state's website:
http://www.nj.gov/njbusiness/

The form is on line and the cost was only $125 charged to a credit card. You will then be prompted through the additional steps to register with the state to collect sales tax and among a few other registrations, all pretty simple and at no further cost.

You do not need insurance to register your business. You do need insurance to protect yourself. I have State Farm for my home and auto and called them. $1 million liability, $10k on my equipment, and $5k for medical at only $180/year. I want to double my liability and add an errors and omissions clause but haven't yet gotten a quote for that. And you are right about commercial work. I'm a procurement director by day and would require a certificate of insurance from a photographer before hiring them. And your friend is also right that you can get insurance very quickly so no need to purchase it before it becomes necessary.

Good luck.

thanks for the replies guys. and thanks peace for your reply since we are in the same state. im just decided if i should go ahead and go forward with registering because then i can fully advertise and get the ball rolling, but again im not that busy were i feel like i should register. its more family now then customers.

[MJPhotos24]

I just read through NY's LLC formation and lemme tell ya - I'd be using a lawyer to go through that mess. Don't know if I could do it on my own just in fear I'd screw something up.

As for the insurance topic, many people won't hire you without it. To work in the school system I believe you have to have it (dependent on where you are probably) and other places want it as well when working with kids and such.

You also know you can do it as a side business and it goes on taxes as "hobby" until you make a certain amount each year right?

[Fabian9931]

You also know you can do it as a side business and it goes on taxes as "hobby" until you make a certain amount each year right?


mmmm not sure if i understand you on that... can you elaborate? thanks

[MJPhotos24]

mmmm not sure if i understand you on that... can you elaborate? thanks
I'd have to ask the person who does my taxes, but if it's a side business you can claim it as misc. income as long as it doesn't make x-percentage or something. I had photography filed under that for awhile because still in college and working at schools - but now that it's taken over to 80+% of my income has to be a business. Ask a lawyer or HR Block, or someone that knows. Just going off what I was told 2 tax seasons ago.

[Peacefield]

Fabian, I'd encourage you to register. Partly because it's so cheap and easy. But also, (and I am not a tax expert, so see one about your specific circumstances) establishing yourself as a real business has a number of tax benefits. I have space in my home that I've now dedicated as an office and studio and can realize a pretty substantial deduction for that every year. Also expenses including business-specific equipment purchases. I do weddings which has a long sales cycle and as I registered late in 2008, my business will essentially be showing a sizeable loss until 2009. A definite tax benefit for me this year and probably every year. But again, see a professional. Enjoy.

[Fabian9931]

Fabian, I'd encourage you to register. Partly because it's so cheap and easy. But also, (and I am not a tax expert, so see one about your specific circumstances) establishing yourself as a real business has a number of tax benefits. I have space in my home that I've now dedicated as an office and studio and can realize a pretty substantial deduction for that every year. Also expenses including business-specific equipment purchases. I do weddings which has a long sales cycle and as I registered late in 2008, my business will essentially be showing a sizeable loss until 2009. A definite tax benefit for me this year and probably every year. But again, see a professional. Enjoy.

thanks for the great reply.

[MJPhotos24]

Fabian, I'd encourage you to register. Partly because it's so cheap and easy. But also, (and I am not a tax expert, so see one about your specific circumstances) establishing yourself as a real business has a number of tax benefits. I have space in my home that I've now dedicated as an office and studio and can realize a pretty substantial deduction for that every year. Also expenses including business-specific equipment purchases. I do weddings which has a long sales cycle and as I registered late in 2008, my business will essentially be showing a sizeable loss until 2009. A definite tax benefit for me this year and probably every year. But again, see a professional. Enjoy.

You do that by square footage used or percentage of bills?

I've been writing off gear for years before being an official business...and there's only so many years you can show a loss before you can't write it off anymore as business materials. Can't remember how many but that's what I was told, really gotta go get a refresher course in it this upcoming tax season. :)

[Peacefield]

Well, let me once again qualify the following statements: I am a photographer, not a tax guy.

I used Tax Cut software to do my taxes. Out of curiousity, I pulled out last year's version and ran through with some business assumptions. When it came to home office, it did ask me square footage of the office as a percentage of the home's total square footage. It gave me a deduction for that and applied the same percentage to my utility expenses.

Someone told me you can run a loss for two years, but I don't really know the story. I had my start up costs this year, I hope to buy one more L lens and the new 5D next year, and I'll allow myself to go profitable at least by year 3.