Do Photographers Need To Collect Sales And Use Tax Virginia

Monday, January 31, 2011

For Photographers: Let's Get Legal!

And so this blog post is directed more to photographers, but I recollect it tin can exist helpful for brides when choosing a photographer to ensure they are a legitimate business organization that will exist around long after your wedding ceremony!  I go a lot of emails from new photographers that inquire about setting up their business.  I applaud those that want to set a nifty foundation for the long run and keep things legal!  Starting a business concern is more so just getting a website and Facebook page and declaring yourself a professional.  That might sound harsh but would y'all rent a plumber considering he has 500 fans only no insurance in instance he floods your house?  I promise non 😉  We are going to talk almost a lot of things that get beyond a website and it might scare you lot to think well-nigh all this stuff when you just like to accept pictures merely if you lot want to be in business organization yous accept to sympathize the realities of it.  These are things that I accept learned over the terminal couple years and they aren't a big secret but I think a lot more people might think twice about going into business if they knew all the behind the scenes work required.  Those that know the piece of work required and are prepared to do it have a much higher chance of succeeding in my stance, although sheer dedication can get you pretty far too!  I have learned about all of these things from google searches and photography forums.

Here is my disclaimer that I'yard not a lawyer and you lot should research the things I embrace to encounter how they use to your concern.  I will also include links to people who are smarter and so I am and I encourage you to check out what they take to say!  So permit's talk business concern!

1.  Company Name- When you are dreaming upwardly what your new logo might await like brand sure you lot do your research on the name you are choosing.  Goose egg worse then having to rebrand after years every bit XYZ  to ABC.  So save yourself some hassle and get-go with a simple google search for your called proper name to make sure it is not taken or even trademarked, besides check out domain naming sites to see what is bachelor.  I chose to cover this commencement because you will need a business name to follow the rest of the steps.  You may besides need to file a Doing Business organization As (DBA) with your city/county to open up a checking business relationship with your business concern name.  Bank check with your urban center/county for their rules and regulations.

two.  Business License- If you are establishing a business organisation yous need to bank check with your urban center/county and state to see what their requirements are for getting a business license.  There are fees involved with this and don't be surprised come up tax fourth dimension if you get a tax beak from your city/county for your concern and concern equipment.  Welcome to beingness a existent business, it'due south not always fun.

iii.  Concern Entity- There are several different entities you can form when you start your business organisation, the common ones include Sole Proprietor, Limited Liability Corporation, Corporation, Express Partnership, etc.  You volition need to research with your state and perhaps contact a lawyer or tax adviser to determine which bests suits your business.  There are also fees involved in registering your business with the state and having a unique name is necessary because your land keeps a database of all the businesses registered in information technology.  I propose choosing an entity that will protect your personal assets divide from your business organization assets, you actually don't want to lose your firm because a client sued you for bad photos and was able to come after you lot for everything you own.  Is that a worst case scenario?  Probably, only better to be safe then sorry.Update:  I but met with a CPA yesterday and plant out by using my SSN instead of a FEIN I have severed the break between personal and concern that my LLC provides.  And then yes you lot guessed it today I'chiliad getting a FEIN number from the IRS to set that!!

4.  Insurance- Every bit a wedding lensman some venues require that I carry liability insurance, this is something that tin be the difference in getting the task or not.  I also take equipment insurance that covers everything in my bag of value.  If my whole pocketbook gets stolen and I have to supercede everything I will be very happy to get that bank check from the insurance visitor!  This situation is non uncommon either, I've heard of thieves targeting loftier end venues and even numberless existence stolen out of cars.  Equipment insurance is great just in case you drop that new 70-200 2.8L lens because is tin can get darn heavy!  Make sure you cheque with your insurance provider to ensure your equipment is covered on location, this might crave a special rider for your policy.  Also if you exercise any shooting or client meetings at your dwelling yous may need to check into your homeowners policy to see if you lot are covered or if you will demand additional insurance for that.  A customer slipping on your front end walk because it snowed the night before could put you out of business before you even outset.

5.  Professional Memberships- These can be to the local Sleeping room of Commerce, Better Business Agency (BBB) or as I accept the Professional Photographers of America (PPA).  I recommend every lensman join PPA and sign up for their Indemnification Trust.  They provide legal advice and possible counsel in example you are sued for negligence in situations such as digital data loss, missing images and client dissatisfaction.  PPA also provides classes and preparation throughout the year, as a professional person photographer you should exist standing your education but like yous would in a traditional career.  Early in my business I was able to take a fantastic class through PPA called the Business of Art and it actually helped me set the foundation of my business.

half-dozen. Sales Taxation-  If you lot are charging for your services so you demand to know if y'all should be collecting sales tax.  States have dissimilar rules when it comes to photography and some require y'all collect tax on your session fee and products while others only require it on physical goods.  It is up to you to know what your state requires and to follow their directions appropriately.  Check with your tax adviser and your State sales revenue enhancement office and make sure you become the data in writing with a name attached.  If you lot are audited years downwardly the line you don't want to discover out you were told the wrong data over the phone by someone they've never heard of.  I know even calling the Virginia Sales Tax office and asking about photography volition get you different answers so I cull to collect tax on goods and services.  Every month I have to report my earnings to the tax office and plough over the tax money I have collected, fifty-fifty if I don't have any sales I need to report $0 income to avoid paying a late fee.  Nothing worse then paying a late fee when you lot didn't even make any money that month!Update: The Virginia Section of Tax and Revenue requires y'all to collect sales tax for photography as they consider that the servi ce is "labor" creating a concluding product. You lot are welcome to contact them directly if you lot have any further questions.

Title 23 VAC 10-210-2050 states that the taxation is applicable "to the total accuse to the client for a photograph, slide, etc., including merely non limited to, charges for labor, photocomposition, setting pattern, photography time, and any other components of the charge regardless of whether such components are separately stated."

And

The object of photography is to provide a customer with a photographic image, the sale of which is taxable whether delivered equally tangible personal belongings or as a digital prototype.

7. Income Taxes-  Uncle Sam gets a portion of your earnings, no if and's or buts about information technology that I've constitute.  Talk to your tax adviser to effigy out how much you demand to set aside for state and federal income taxes.  I recommend setting aside your tax money from each task so you aren't scrambling to come up with the cash come April 15th.  Update:  As a full-time lensman that is really making some money from it (Wahoo!!) I accept to pay cocky-employment taxes quarterly now.  I tried to effigy out how to do it on my own and when my brain exploded at the calculations but I figured out that my accounting software volition track information technology for me! I apply QuickBooks Self Employed.

8. Business Plan-  Your local Pocket-size Business Clan (SBA) might offering free classes on establishing a business plan then you should definitely check them out.  You lot can also google business plans or even check out templates through Microsoft Word.  It forces you to sit down and think nearly what yous want to do with your business.  This plan will also change over the years equally y'all change.  It needs to be flexible just structured to keep you on rail.  As far as photography specific business plans I take used Laura Novak's Strategy Avenue and found it to be really neat with walking me through planning my business.  I'll admit the first fourth dimension I did my plan all I knew was that I wanted to exist a photographer full time and I had no idea how to get about it or what kind of clients I would target or how to market myself.  I'chiliad near to update my plan since information technology is the showtime of the year and I can tell you it will be a much tighter program considering I know what I want and how I'm going to get in that location.  So even if you accept no idea you should review the questions and be thinking about them in your business and as time goes past you might just start figuring out the answers!  Alicia Caine is another photographer helping photographers tackle business plans and she is releasing Happy Place this week.  You can check out the first chapter on her Facebook folio.  I have not used it notwithstanding since it hasn't been released yet just I'yard a huge fan of her pricing guide I will cover side by side so I expect this will exist just as awesome!  A corking concern plan will aid yous if you need to get a loan or capital for your business.  An investor wants to make certain you are serious well-nigh your business concern before they requite you whatever of their money.

9.  Pricing- And so now we have established that running a business organisation isn't cheap, the higher up items run me at least $1000 a year not including the taxes.  And so even if I make $0 dollars I have to crush out over $1000 in fees just to be in concern.  At that place are many other fees and expenses that I haven't fifty-fifty scratched the surface on when it comes to running your business.  How are you going to pay for all of that?  This is where pricing comes into play.  Looking at your local competition might give you an idea of what the market is like but you need to fix your prices based off your business expenses and do the homework to figure out your price of practiced sold.  PPA has a great benchmark survey to give you lot an idea where to start when knowing how to become profitable.  They likewise take bang-up SMS classes to help you go your concern running and setup for a solid future.  When information technology comes to really helping y'all with pricing in like shooting fish in a barrel to empathise language I highly recommend Alicia Caine'south Easy as Pie pricing guide.  Even if you are in the portfolio edifice stage this is perfect to help you with the bound to charging for your work.  I so wish I had her guide when I first started.  You are going to learn that you will demand to charge more than then you think when you lot are a legitimate business if you programme to stay in business concern.  If you are a wedding ceremony photographer your all-time pricing resource hands downward is from Stacy Reeves and is aptly titled "The Single Greatest Guide to Wedding Photography Pricing That Always Was and Ever Volition Be." Reading her guide and pricing out my wedding collections scared me to decease but I know that I am on the path to staying in business organisation for the long run now.  Another peachy resource for pricing is from Tofurious and covers Creative Pricing and Packaging.

ten.  Money Myth of Photography- After going through just the tip of the iceberg on running a business I hope yous realize that photography is not a fashion to make like shooting fish in a barrel money.  A better blogger then I has broken information technology down for united states and I think every professional person lensman that reads this thinks "Amen sister!".  Do Professional Photographers Really Make Money? written by Heather Lilly is a real wake-upward call as to what beingness a photographer with your ain business organisation is really most.  She has covered things that even made me go uh-oh I need to get-go doing that, like saving for retirement!!

I may not have covered the above topics in the near professional style but it is a brain dump of things that I've learned over the years.  I hope that is is helpful to those that really want to succeed with a photography business organisation and tin get started on the right foot.  If you actually honey photography so I only saved you over two years of figuring out some basics!

Do Photographers Need To Collect Sales And Use Tax Virginia,

Source: https://www.melissaarlenaphotography.com/photographers/legal/

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