Photography Business Start Up ??'s

Here are a few questions for all you freelance/magazine/sto​ck/fine art photographers out there who make money off your photos...

I'm looking to start selling my images but only on a part time basis. Meaning I'm not quitting my day job. My plan is to try and sell to magazines, do Stock photography, fine art, the occasional craft fair, and eventually a web site. I'm not expecting to get rich, just generate a supplemental income to support my hobbies. I should also add that I'm not out to sell at rock bottom prices and under-cut all you pro's out there making a living. I've been reading the forums here and also a book on starting your photography business but the book mostly deals with starting a studio. It has lots of useful info that has helped put things into perspective such as overhead, pricing, cost of doing business, selling your self, etc. I want to be legal and above board. I'm assuming you need to have a business license as you are generating income from selling your photos. But being that it is going to take a while to get established and there may not be any income coming in at all at first, when do I need to actually get 'Official'?? By being a small photography business that is not currently generating any income, what kinds of Taxes can I expect Uncle Sammy to hit me with?? I know it can't be as easy as you just pay taxes on what you earn so if you can please enlighten me to the hidden costs associated with being a self employed 'weekend' photographer I would greatly appreciate it.

Thanks!
-Mack

I am not a pro photog, but I know a little about small business. Your tax liability depends on your business entity, or how you file your business name and registration with the secretary of state.

As a sole propreitor, income you make/losses you take are reflected directly against your personal tax return. If you don't make anything, there is no income to claim and none to add. If you establish yourself as a corporation, it gets a little murkier, starting with having to file a seperate return for the corporation before your file your return and then adjusting your earnings based off how your business did. There are S and C corps that handle taxes differently. I would curious to hear from the pros as to what entity they chose when starting up...

The short answer is that you are not liable for any additional income taxes until you add to your yearly income, but there are a lot of rules to keep straight. The best thing you can do is find a good accountant (call another photog for a reccomendation) and have him help you set up your books. No matter how large or small your business venture, a decent accountant is always a good investment.

Just my 2 cents.

If you really want to start selling to the public you should form a business with all the prper paperwork. Soon as you accept money for product it's a business transaction. Might as well track expenses & income so you know if it's really worth the trouble. I believe you have up to three years before having to show a profit.

CPA's cost but could save you in the long run.

Ok Here in CA, in order to sell you must have four licenses/documents in your business location.
1. Business license from your local city
2. Register your business name with the county you are in and or a fictitious business name too. Fictitious business also requires a newspaper ad for a certain time period
3. Resale permit from the State Board of Equalization for sales tax.
4. Tax ID or your SSN

At first the state will not require you to make monthly or quarterly sales tax payments. You will be requried to do that once a year depending on your sales. If your sales go through the roof then they will want to put you on a schedule.

Some things you need to know;
1. Photo LABOR is taxable in this state.
2. There are taxes on any tangible item that you sell, prints, frames etc.
3. There are not taxes on electronic transfers of images.
4. In the begining just use a basic cash accounting system for your accounting, nuthin fancy.
5. Use a seperate checking account for your business, you will need the tax ID and the resale permit prior to opening the account at most banks.

Make an appointment at the franchise tax board and get all your ducks in a row prior to starting your business. Go to your county registrar for the other stuff. City biz lic may require a fire inspection depending on your citys laws. So make sure you have a working fire ext, smoke alarm and clear pathways.

I hope this helps, but stay on that end of the state, will ya.... we have enough lousy photographers up here already...... TFPIC :-0

Les Baldwin

Thanks for all the great info!! I really appreciate it.

-Mack

Some areas have a "business property" tax on equipment.
For others reading, "1. Photo LABOR is taxable in this state." does not hold true everywhere. A good accountant can save you a lot of $s!

Excelent! Thank you PhotosGuy. That is the kind of 'hidden' cost I'm talking about. I realize I may have to give away some free money to Uncle Sammy durring the lean times, but I want to keep it to a bare minimum. He already takes more than enough out of my regular pay check as it is.