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07/24/2006 03:28:50 PM · #1
In VA you don't have to have a business license unless you've made at least 4k- that's what hubby says anyways since he's started a catering business in the past few months.

Well I now have had 3 portrait shoots, have another on thursday, and 3 seniors lined up for fall- all have made deposits.

My thing is I hate to get a license and only do a few shoots here and there like I've been doing. But on the other hand there are a few things I'd like to have and in the future will need that I could write off tax wise since I'd need them for my business. I don't plan on going huge with this by any means. I won't be doing weddings. If the portrait thing does happen to go a little bigger than it is I do plan on buying some studio eqpt.

So with 4 paid/prepaid portrait sessions already is it worth getting a license?

My session on tuesday is with my first portrait session I did. He just got signed by a modeling agent and they are using 3 of the photos from his portfolio I did. They are doing another shooting at my request because I wasn't completely happy with the outcome of the first one- I did it for free as publicity for me and as "practice". They ordered from that session so THEY liked what I did lol so that's nice. I know I can do better and have made progress in the past couple of months.

Anyhow, thanks for any pointers!
07/24/2006 07:01:27 PM · #2
There is no statewide business licence in VA.

You can register your business name with the state to get a tax id number, which you will probably need to do anything else.

You register your business with the county or city (or both) that you live in.

I went through all this about 6 months ago.

First, registered with the state corporation commission to get my LLC on the books. ($100)
Then I registered with the IRS to get a Taxpayer ID Number (Free)
Then I registered with the state tax agency to get a sales tax ID (Yes, I collect sales tax from my customers) (Free).
Then I registered with the county my studio is in to get a business licence. (Varies, was $30 for my town)

You should do all of this, but it can be a pain. My general rule of thumb is that if you're going to be doing work (paid) or not for friends and family then you don't need to bother with it... if you're going to be doing work for hire for anyone you don't really know then you ought to go through all that.

If you want any specific advice feel free to post here and I'll get back to you. Like I said, I went through all this in Virginia about 6 months ago to get my business going.

Good luck!
07/24/2006 08:31:25 PM · #3
Ty ty,

So if I'm doing portraits for seniors- that's basically what I'm going to start doing, family portraits, and things like that for people I DON'T know, then I need to do the things you listed?

And from what you've said, hope I understood this right, it depends on the county you live in?

Going to write all this down. I've only shot one person I actually know and that was a family friends daughter. I didn't charge them. The kid I am shooting on thursday is ordering prints from his first session. And they'll probably order prints from this session too.

I think I'll go ahead and go through with all of it then to cover my back. Thanks for the help!
07/24/2006 09:21:00 PM · #4
Each area is different.
you don't need a fed EIN (tax number) until you have employees or your incorporate. Your SS number works till then.

If you are chargning people, the state and feds really want you to declare that as income, whether it's a business or not, and to collect and pay sales tax. Here in PA to get a state sales tax number/license is free, done online, you pay online - easy.

Again, in PA if the biz is your name you're in biz with NO paperwork. If it's something like M's Photography then you need to file all kinds of crap and it can get costly as you need to advertise in the local paper the DBA (doing business as) bit.

As for taxes and all that, TALK TO A CPA. So it costs $50 or so to get the professional advice you need - if you don't know about receipts, categorizing expenses, having a home office (and all the deductions you get) then you NEED to talk to a CPA.

My local township has a business license requirement for home based businesses - It's not too terrible, but it's there for a reason. You don't want the guy next door to start a slaughterhouse or porno gift shop do you? I don't need one IF no clients come to my home. As soon as I started meeting with clients here I needed one. Again, mostly done on teh web, and no one came to see anything (although they can) - issues like traffic, parking, employees, etc. I need 2 parking spaces, cannot have employees working here, can't do things at 3 am, my sign has to be too small and attached to the house. Your local area will have it's own unique issues, all because someone in the past pissed off their neighbor and a law was passed to settle the matter.
07/24/2006 09:28:49 PM · #5
Steps 1 thru 3 are all done with the state.

BUT! If you are only registering your business as a "sole proprietorship" then you don't need to do number 1. Instead you file a "fictious name" registration with your county. You can also skip getting a Federal Taxpayer ID number, since you can use your own SSN for the business.

An actual "business licence" is from the county... unless you live in an incorporated town (like Alexandria) then you go to the city. Wherever your car tax sticker is from that's where you need to go.

Confused out of your mind yet? :)

Here's your first step in figuring out what you want to do...

Research (google) the different kinds of business that you can form.

Sole proprietorship and LLC (Limited Liability Company) are the two biggies. The paperwork changes based on what kind of organization you want to have. Let me know which way you want to go and I can help you out.
07/24/2006 09:37:22 PM · #6
Originally posted by Prof_Fate:

Each area is different.


Chris, you are absolutley right. :)

Here in VA (where the OP is also) you don't need to do anything to get a DBA than fill out a form at the courthouse and pay a small fee. It's really easy and cheap. :) LLC is only a tiny bit harder because you have to mail a form (one page) off to the state. :)

My annoying ass small town also had all kinds of crap I had to do to get my "Home Occupancy Permit" for my business... I ended up paying more for that than I did my county business licence. Big fish in a small pond.
07/24/2006 10:04:25 PM · #7
You don't have to have a license(every state I know of, some people below sounds like they have had to). You do have to pay taxes. So if you want to be a sole prop the only thing you have to do is claim and pay the income over the 4k that you made fromt he business (I thought it was 6k). I would talk to a local accountant for sure.

If you are a sole prop your photo money is your money, and your money is the photo business money. There is no seperation between you and the business legally. The advantage is that you are only taxed once, and it is simple.

If you incorperate (I recomend S-Corp for your size) there would be seperate "books" for your business thus seperating you from the business and making the business its own "person" to be taxed. So in effect you would be paying taxes on your money and your business would be paying taxes on its own money. The benifit of that is that you are protected legally from the business.

In business school I figured out quickly that all the rules and regulations are about the government getting its tax money.

Bottom line you might only need to open up a bank account (name registration is optional in CO, you can use your own name) throw some money in an account and keep track of it so you can tell the Goverments (state and fed) how much you made at the end of the year in each of your endevors. Technically you don't even have to open up an account. The reason you would keep seperate track is because you would have a real hard time telling the Feds where your money was coming and going if you were using your main personal account(although a second "personal checking" account would work, you don't need a "business checking" account with a SP unless you are trying to register your name).

If you are only doing say under $15,000 a year I wouldn't bother incorperation unless you are doing some picts where people are going to be suing you or using them in big commercials or something like that where you might be liable in some sort of suit.

$50-$100 is worth it to talk to an accountant though!
07/25/2006 12:47:59 PM · #8
So I just got off the phone with our professional friend. He's licensed, ect. He said to not even worry about doing anything till Jan because I'm going to have to pay 100 for a license even though it would expire in Jan anyways. He said it runs from Jan 1st to Dec 31st. He said I don't have to report anything to the govt in our county until I've made 4k or more, and since I'm nowhere close to that I don't need to worry about it.
Going to see the legal officer on base next week and talk to our neighbor who is a CPA next and make sure that's all true. I trust our friend and he's been in the business for a long time and wouldn't do anything stupid, but I also don't want to do anything stupid myself lol.

07/25/2006 02:35:37 PM · #9
I dont' know of any govt taxing authority that gives you (or a business) the first $4000 or $6000 in income tax free. It doesn't work that way, at least on the federal level.

Here in PA to be a sole prop uner 'perry photography'or such requres no paperwork. people make checks out to me, but bank takes them. If i call the company 'Perry and Sons Photography' or Sudio P or Pictures by Chris then I need a DBA - state registration and that requires the ad in the paper (so 'the community' is aware of your 'fake name' and also to alert anyone else using that name (unregistered) that their probably screwed.)

LLC and S-corp will work to a point to release you from liability, but you need officers, paperwork (there are rules on having meetings, keeping minutes, etc). And if you do get sued a court can say the 'veil of corporation' was a sham and leave you open to full liabiliy anyway. Also, YOU have credit and assets. The new corporation has neither - hard to borrow money or sign leases, etc without credit - unless you as a person co-sign and well, why bother incorporating then?

Some banks require some proof of a business to open a business account - and if the customers are making the check out to "Studio P Photography" you're gonna need an account in that name to cash teh checks.

My lab charged me sales tax until I got a state sales tax number and filled out the exemption form and gave it to the lab. That saves me 6% on every order of prints. I can deduct it as an expense, but I have to pay it first.

DO what teh CPA tells ya. The IRS wants quarterly tax payment for the self employed, but my acc't tells me not to worry until I make more money.

The purpose of the license is to let the gov't collect taxes as much as anything else. But also remember that if you get caught running an 'illegal or unlicensed business' there are fines and things that may occur.

How would you get caught? Well...a pissed off competetor can turn you in, a PITA neighbor, unhappy customer, or perhaps the town's city manager's daughter comes for pics and dad comes too...you never know.
07/25/2006 06:56:38 PM · #10
Originally posted by Prof_Fate:

I dont' know of any govt taxing authority that gives you (or a business) the first $4000 or $6000 in income tax free. It doesn't work that way, at least on the federal level.

Here in PA to be a sole prop uner 'perry photography'or such requres no paperwork. people make checks out to me, but bank takes them. If i call the company 'Perry and Sons Photography' or Sudio P or Pictures by Chris then I need a DBA - state registration and that requires the ad in the paper (so 'the community' is aware of your 'fake name' and also to alert anyone else using that name (unregistered) that their probably screwed.)

LLC and S-corp will work to a point to release you from liability, but you need officers, paperwork (there are rules on having meetings, keeping minutes, etc). And if you do get sued a court can say the 'veil of corporation' was a sham and leave you open to full liabiliy anyway. Also, YOU have credit and assets. The new corporation has neither - hard to borrow money or sign leases, etc without credit - unless you as a person co-sign and well, why bother incorporating then?

Some banks require some proof of a business to open a business account - and if the customers are making the check out to "Studio P Photography" you're gonna need an account in that name to cash teh checks.

My lab charged me sales tax until I got a state sales tax number and filled out the exemption form and gave it to the lab. That saves me 6% on every order of prints. I can deduct it as an expense, but I have to pay it first.

DO what teh CPA tells ya. The IRS wants quarterly tax payment for the self employed, but my acc't tells me not to worry until I make more money.

The purpose of the license is to let the gov't collect taxes as much as anything else. But also remember that if you get caught running an 'illegal or unlicensed business' there are fines and things that may occur.

How would you get caught? Well...a pissed off competetor can turn you in, a PITA neighbor, unhappy customer, or perhaps the town's city manager's daughter comes for pics and dad comes too...you never know.


Okay it's not tax free to 4k, but he said if you're only making a few hunder bucks, or a 100 here and there then no need to turn it in. He said to include the tax in my pricing instead of charing tax on top of pricing. So I think either way I'm going to turn it in to cover my butt. I don't need a license however till I've hit the 4k mark.

I won't be giving myself a business name or calling it anything. I've made up business cards and they simply have my name on it, then photographer underneath.
I think Jan I'll wait till Jan to really get that deep into anything. I have a few seniors lined up and that's it for now. I've had other calls but have turned them down because I don't want full time work nor do I want to work all weekend. I want this to stay a hobby and keep it my passion. My job at home comes first. But if the seniors spread the word who knows where I'll go lol.

07/25/2006 10:54:03 PM · #11
Seniors can be great money. I have not cracked the code to advertsing to them, but of the few i've done I'm averageing about $280 in sales including the sitting fee. No sales pressure, no packages, low prices. Time wise - 2 hours for the sitting usually (including paperwork time, phone calls, etc) and then 1-2 hours PP work, web proofing, etc. Not bad.

You make bigger cash at a wedding, but it's 8 hours on the wedding day, often 4 hours before that (consult, phone/email, previewing sites) and then 2 or so hours PP to get to proofs and after that...could be 20 hours working on an album - 35 hours easy. Not easy to do part time.

Some folks do well with sports - little league, etc type sports. Mostly team pics, individual pics, etc. It doesn't appeal to me at all. Here in PA sales tax is added on top of everything - i collect it and then pay the state - so everyone expects to pay it on top of the prints or sitting fee, etc.

Once you decide to 'be in business' you can deduct ffrom your revenue the cost of doing business. As it is now, you sell an 8x10 for $20, the IRS wants you to claim that $20 as income. Well, sure, but it cost you $2 to get that print - your real (net) income is only $18, so it's not fair you pay tax on $20.

So you get to deduct (in some form) the prints you buy, advertising (biz cards!), your computer, phone, camera equipment, software, schooling, educational, internet, and then your office space - if a room is dedicated to the biz, lets say it's 20% of the square footage of your home - then you can deduct 20% of the rent/mortgage, property taxes, electric, etc.

In my case I put in a new furnace last year (in my home and I have a home business)- i get to deduct part of that furnace on my business taxes!!! (That's what my CPA tells me) I itemize so i acutally deduct my property taxes twice. (once personally and once for the business).

It's the system and it can work for you. There's a learning curve, but it's a challenge and not that difficult. This is my first year truly running my photo biz as a biz and my sales are approaching 10 grand so far for the year. Not bad since I think jan-april i made about $500!
07/26/2006 09:03:42 AM · #12
Well I have the chance to shadow our friend at a wedding next month but really have no plans of doing them myself. FOr one I don't have the eqpt and two I don't have the time.

As far as the seniors I basically did the first session with a 15 yo who is VERY popular at the highschool- drama, choir, now signed by a modeling and talent agency. I put about 50 business cards in his packet when I gave them the proofs and he passed them out at school. His mom put his pictures on her screen saver on her computer at school and a lot of the other teachers saw them and wanted to know who did them so she passed out some business cards there. Then she made an announcement at her church- very large church, and I got a couple calls from that.
I'm keeping this VERY small for now lol. I don't even have an external flash yet- hopefully for my birthday next month, and I do have a friend that is willing to sell me his umbrella's and backdrop set up should I want to go the indoor route.
07/26/2006 10:10:45 AM · #13
You can dream, right?
//www.photographybyvicki.com/

She claims to know little about photography, but started about 5 or 6 years ago part time in her home and has grown the biz quite large and is not on the lecture circuit. Claims to average something like $1800 per HS senior in sales. Does no more than 2 a day.

In year 3 she bought a former bowling alley for a studio, and has expaned it at least twice.

Message edited by author 2006-07-26 10:10:53.
07/26/2006 01:11:09 PM · #14
Oh wow, yes one can dream lol.

I'm not sure what my goal with all of this is yet. My goal a year ago was to get back into school and finish my bachelors in science. Now I have no idea since I've taken photography up lol.

Would I like to have a small studio? maybe. I'd like to stay away from weddings lol. But I LOVE shooting children. I did our friends daughter last week and her mom wanted her posed like a lot of the shots I have my own daughter. Even after I explained to her that the pictures of my daughter were all spontaneous, she still wanted to try and get the same settings ect. After a half hour trying to please my friend, I finally just told her to let her daughter be herself and do her thing. It was VERY hot and humid that evening and the poor thing was wilting lol.
In the end all the shots that mom wanted were not very good, but all the ones of her daughter playing in the water, walking on the beach, getting her feet wet ect I got the biggest smiles and some awsome shots. Course I have no external flash and had no reflector that day so could have been better, but I captured something in another child other than my own and I want to fly with that.
So I guess I do have a dream lol, just not sure where to start and I'm just going with the flow right now if that makes sense.
07/27/2006 10:23:49 AM · #15
I know the feeling. a year or two ago i was going to go back to school to become a HS math teacher. I then started looking for a way to make an extra buck to buy more lenses and a friend suggested shooting weddings. I found out I love it.

So for $30,000 and two years in college I get a good job with security and summers off, but not sure i'd love the job. So i chose to pursue the photography business and each month is better than the last - so far anyway (fingers crossed).

chris
08/04/2006 07:45:21 PM · #16
Do you know how far back in time you can claim deductions on equipment purchased — once you become a "business"? I have all my receipts and credit card bills.

Carolyn
08/06/2006 09:17:44 PM · #17
I have no idea and I'm sure every state is different. I'd think you can only count what you've bought since getting your license but I could be wrong. That would make sense though.
08/06/2006 09:40:12 PM · #18
My tax guy told me that I can only claim the full amount of say a new camera the year I buy it, after that it has to be depreciation. Also, Iowa has a DBA doing business as...so I don't need a license, but I have one as I am collecting sales tax.

Don't know if that really helps or not...my brain is getting fuzy.... lol
08/08/2006 12:00:41 PM · #19
Thanks, guess I need to talk to my CPA...
Carolyn
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