Just got liscensed now taxes?

[AmandaLeigh]

So my photography business just got liscensed but I have no clue about taxes. I have never had to pay them before, keep in mind I'm only 20. No harsh comments about how I'm just now liscensed please. i just want to know anything I can about taxes when it comes to my photography business so I make sure i'm doing it right. I live in Washington state, Lewis County.

Amanda

[PeaceFire]

I am not familiar with your area, but when you got licensed were you given or sent anything? When I filed my licensing stuff and registered my business with the state I got a ton of packages in the mail that explained the dates I needed to have my taxes filed by and how to go about it. They made it pretty simple and let you know what you need to do and when you need to do it.

They also sent me a bunch of pamphlets on menopause and osteoporosis. Not really sure what that was about but I know it got sent to me because I filed that license because of the name used. Sometimes I love the randomness that is the state of CA.

[bps]

Congrats Amanda! (that's awesome!)

I'm not sure about state taxes, but for your federal taxes, you'll want to balance the money you earn against the money you spent in a given year. Anything leftover is a profit and you'll need to pay taxes on that amount. It's not quite as complex as it sounds. Let me see if I can find some good links for you that better explain the situation.

Bryan

[Snydremark]

Hey Amanda,

I can't answer your question, but I'm curious about the whole registering a photo business (in WA, also). How do you even go about that here?

[Tigershark]

Amanda, call your Secretary of State's office or their Department of Revenue and ask how you get set up a sales and use tax id number. Most states are pretty good about walking you through what you need to do to set it up. I looked on Washington's site and it looks it it's in with the Department of Revenue good luck

http://dor.wa.gov/Content/Home/Default.aspx
http://bls.dor.wa.gov/

[Curtis N]

You need an accountant. Find one in your hometown who knows the state and local laws. This will cost a little money and potentially save you a lot more. An accountant's guidance and advice can be invaluable. Don't cheap out on this.

[gjl711]

Licensing has nothing to do with taxes, income does. Whether licensed or not you are responsible to report all the income you make and pay the appropriate tax.

[JacobPhoto]

Originally Posted by Curtis N

You need an accountant. Find one in your hometown who knows the state and local laws. This will cost a little money and potentially save you a lot more. An accountant's guidance and advice can be invaluable. Don't cheap out on this.

Yup. Talk to an accountant.

[ssim]

Originally Posted by Curtis N

You need an accountant. Find one in your hometown who knows the state and local laws. This will cost a little money and potentially save you a lot more. An accountant's guidance and advice can be invaluable. Don't cheap out on this.

This ^^.

While it is great to seek out free advice, what if you happen to follow someone's advice that you got off a forum and it was wrong. When it comes to dealing with any form of the government I always go to an expert that I can sit down and talk to. I attempted to do my own taxes when I first went part time and then after a few years I had an accountant go over what I had done. I had missed so many things that what I gained by paying him more than compensated for it.

[mikeinctown]

Originally Posted by Curtis N

You need an accountant. Find one in your hometown who knows the state and local laws. This will cost a little money and potentially save you a lot more. An accountant's guidance and advice can be invaluable. Don't cheap out on this.

+2 or 3 so far. Best advice. The state will send you information, but that is only for the state and it will or can be confusing. A tax professional will let you know how to structure your business expense and keep track of your funds so that you can maximize your "expenses". They'll also help with reporting income in regards to both federal and state. (and local if necessary) Not only for taxes, but an accountant will help you realize what your true and actual expenses are so that you can price yourself accordingly. There are probably a lot of things you will need to keep track of for expense purposes that you may have never thought of.

[benji25]

Originally Posted by gjl711

Licensing has nothing to do with taxes, income does. Whether licensed or not you are responsible to report all the income you make and pay the appropriate tax.

Licensing has everything to do with taxes. Depending on how she is licensed determines filing dates, payment requirements and most importantly where the taxes are reported. For example, she could have to report them on a schedule on her personal income taxe return or she could have to file a return for her company and the legal entity pays the taxes.

Find a CPA in your town. I work in public accounting and pretty much anything a local photographer would do is very simple from an account perspective. Find a small CPA firm/individual CPA and get their help. If you feel confident enough Turbo Tax pretty much walks you through this stuff as well.

[tracknut]

Originally Posted by benji25

Licensing has everything to do with taxes. Depending on how she is licensed determines filing dates, payment requirements and most importantly where the taxes are reported.

It could be a terminology thing. Here in California, the only license I have is a business license from my city. It has nothing to do with the things you list above. But then neither of us is in the same state, nor in WA.

Dave

[gjl711]

Originally Posted by benji25

Licensing has everything to do with taxes. Depending on how she is licensed determines filing dates, payment requirements and most importantly where the taxes are reported....

My point was that licensing by itself, at least where I live does not change the fact that you have taxes to pay nor does it change how you pay them. Even an unlicensed business has to pay taxes on the income made. There may be additional taxes I suppose but that's a local thing.

[mobei]

Besides income tax there will probably be sales tax license, taxes on the gear you purchased tax free as well as property taxes on the equipment you use for the business. (These would be required whether you have a license or not)
An accountant or tax professional could help you. You could also read your state laws.

[benji25]

Originally Posted by gjl711

My point was that licensing by itself, at least where I live does not change the fact that you have taxes to pay nor does it change how you pay them. Even an unlicensed business has to pay taxes on the income made. There may be additional taxes I suppose but that's a local thing.

Maybe we are talking about 2 different things. I am talking about registering your business as one of the following:


Sole Proprietor (1040 Schedule C),
Corporation (1120),
Partnership (1065),
S-Corporation (1120S),
Trust (1041), and
Non-profit organization (990)

All of which have different return requirements.