Do I need a business?

[wattsbw2004]

I've recently been asked 3 seperate times to license my images to be used for commercial purposes. Since then would count as additional income would I need to have a registered business for when tax time comes around or would I just list this as additional income?

Keep in mind I already have 2 jobs and I'm just doing this as a hobby but I want to make sure I'm in the clear legally when I do license my images to these ad agencies. If I would need a registered business how would I go about getting this done?

Any and all help would be greatly appreciated

[bhursey]

Read your local laws I would recommend consulting with a CPA. If your providing a service in your location. IE shooting pictures or people or hired to take location shots as in companies buildings in your state then you will probably need a business license. If you sell tangible goods as in physical products ie cd's prints albums you will need a sales tax id. Thats free btw but you have to pay the state the % if sales you make each month. My tax locally is 7% sales tax. I have a full time job and I am also a weekend warrior some weekends doing photography. My business license isn 125$ a year. At the end of the year you put your profit and loss in a "schedule c" form with your income tax. It will be listed under you as a sole proprietorship. However you can claim like equipment purchases as a loss which is nice. Like this year I had a 411$ loss I could take off my taxes.

[hibou]

If your experience is anything like mine, when you tell those companies you want to actually be paid for your images, you'll never hear from them again, problem solved

[wattsbw2004]

Lol, thanks Hibou.

@bhursey- This company i'm about to talk to on Wednesday wants to hire me to photograph some buildings of theirs but they also want to license some of my images that I already have of San Antonio. I think the safest route would probably be the business licesne but I'll definitely check with a CPA and see what they say. Maybe something like that won't be needed but it never hurts to ask. Thanks for the advice.

[bhursey]

Originally Posted by wattsbw2004

Lol, thanks Hibou.

@bhursey- This company i'm about to talk to on Wednesday wants to hire me to photograph some buildings of theirs but they also want to license some of my images that I already have of San Antonio. I think the safest route would probably be the business licesne but I'll definitely check with a CPA and see what they say. Maybe something like that won't be needed but it never hurts to ask. Thanks for the advice.

I was the same way you were I wanted to make sure 100% what I needed. Sure I probably could of gotten away without but I would of not been fully compatible with the law and might as well do it the right way so that it wont bite you in the future.

I actually went to a cpa who had a no commitment free first session. LOL sat down showed him what I do and my paperwork and ledger and he told me what I needed to do. I have not seen him since. However if I ever need a cpa i will go back.

[GadgetRick]

In short, no, you don't need to register a business...yet. Consult your tax advisor of course.

In long, if you're making an appreciable amount--maybe $2500 a month, it all depends--you will want to register a business name, etc. for tax purposed. Until then, you can just report your income (and your expenses) on your taxes. You'll be taxed appropriately and will be conforming with the law.

Now, I'm talking federal here, my state--NJ--is the same way. I don't know how your state is.

I would recommend it soley based on the fact that if the business is anywhere close to legit, they will pay you and have you fill out a 1099 form as an "independent contractor" which in turn will be turned in to the government.

If you don't claim that income on your taxes, the government will NOT be pleased.

Starting a business is a good way to keep your personal expenses separate from photo work. You can claim your camera and all the equipment (and depreciation (sic?)) as write-offs (which is GOOD!!!!!), meals, gas, computer...etc...etc....

I have a different bank account in which I get paid, all my equipment is paid through that account and makes it easy to keep track of where my money is going and to what part of my life.

Just my $.02

~Eric

[wattsbw2004]

Thanks everyone!

My g/f has a tax consultant that she uses each year so I'll check with her and see if I can get a quick session in. The main thing I think I was concerned about was how I go about claiming this extra income which so far once I go through with them will be a little over $1000 I think, maybe more depending on tomorrow.

But since this is mostly a freelance thing that I'm doing for one business and a few licensing opportunities I wasn't sure what was needed to continue with the negotiations before I get in to deep.I didn't want to end out coming away with nothing due to something small that could have been taken care of.

[Dennismc]

if they give you a 1099 at the end of the year, you would claim it on your regular tax form.

Look into setting yourself up as a business anyway, anything other then a sole proprietorship.

S-Corp or a regular corp..Simply for tax reasons and asset protection.

Originally Posted by Dennismc

if they give you a 1099 at the end of the year, you would claim it on your regular tax form.

Look into setting yourself up as a business anyway, anything other then a sole proprietorship.

S-Corp or a regular corp..Simply for tax reasons and asset protection.

I'm an LLC.