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Question from Sherrie: “I do not have a business license. I mostly do nature and am working to to portraits. I recently entered a amatuer contest and did quite well. I was told my photos “screams pro”. Quite the compliment I thought! At what point do you say you are a business? Is there a dollar amount per year? I read a contests rules once that said to be considered prefessional 51% of your income had to come from photography. I guess my question is how much portrait work can I do before I should have a license?”
Elisha: You need to check with your state–some places it’s as little as $200. If you need a sales tax license you DEFINITELY want to do that ASAP. Better safe than sorry!! My state doesn’t require a business license and the sales tax license was free…I just charge 6% and then I pay that to the state biannually. They asked on the form what I estimated to make and I only put $1000–turns out I’ve made way more than that, but I don’t think they care.
Ashley: As soon as I started making most with photography I got a business license . I am so worried about getting in trouble with the IRS for receiving income without being held accountable for it. I live in Cali, don’t m owning thT matters but I am interested with what other people say. I don’t really charge enough, or work enough for it to truly be profitable either….
Selena: Once you start charging for your work, you must register your business. I’m not sure if the law is the same where you live Sherrie, but here in B.C. you have to be a registered business in order to take in any profit. Dollar amount per year will effect which type of business you should register as. I’m a registered as a “proprietorship” as I am the sole-owner of my business and have no employees. I also take in less then $30,000 a year should I don’t have to charge my clients taxes. The best advice I can give you is to go and talk to some one at your local goverenment building (they handle business registers and can point you in the right direction,) or a free lawyer if you have any in your area. Best of luck Sherrie! This is a decision that will greatly impact the way you run your business + how you claim your taxes this year. Don’t rush this! 🙂
Julie: Where could one find this out? I live in Ontario, Canada and I’m not sure what to search to lookup such information
Selena: Btw, once you start charging for your work, you are a professional! 😉 Techinically speaking, yes 51% of your income should come from your business before you are TRULY a professional. But if you have a registered business in a trade and am charging for your services, you’re a pro, no matter how much income you take in. Glad to hear you’re doing so well already!
Golden Photography: Agree with many previous posters – the second you charge anything for your work you need a license. Once you have that license you can get a bank account and start collecting money. Don’t do one without the other! if you collect money and don’t pay tax on it (because you choose to not get a license), it’s essentially stealing. And the fines for not paying taxes on something far outweigh just sucking it up, getting the license, and paying the sales tax in the first place.
Selena: @Julie Lavelle, as I said above, go to your local government/provincial building or check with a free lawyer. Either one will be able to give all the info you need 🙂
Jess: So I am not the original poster but if your costs still outway what you bring in do you still really need to?.. i mean you have more writeoffs then what you make… or do you all think that doesn’t matter and you should just waste time doing the taxes?
Jess: I am just asking because I know a few that do it more as a hobby and don’t charge a lot they do it more for fun then to survive on the income…
Jennifer: If you’re taking money, then you’re in business.
Mollie: Just want to add: Once you take in money, you may be a business – but that doesn’t make you a professional. (Yet!)
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