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 p.1 #16 · Brainstorming - need advice | |
JWilsonphoto wrote:
Dear Andy,
What you are thinking about isn't nearly as big a deal as it seems. The California photographers are telling you what is required in CA, you're in The Lone Star, be thankful. It seems like you want to dabble and amortize equipment upgrades and there's nothing wrong with that, it just adds a little complexity to the situation.
What you should do in Texas, to set yourself up in business is:
Register your business name by filing an assumed name document at the Killeen Courthouse, it'll cost you 10 bucks. This does two things, protects your name from duplication, probably not a big deal in your case. Second, and more importantly, it allows you to use that name in filing a sales tax/reseller form with the state. You can then purchase your equipment, and anything that goes into your photographic product, printers, ink, paper for your office documents, invoices, business cards, etc, tax free. You'll be required to complete and return a monthly sales tax form, whether you have sales or not.
There are few advantages to incorporating when it's a small individual business like you are thinking about. Most businesses like this are sole proprietorships. Whether you are in business or not, if you have very much money invested in your gear, you should have your insurance agent "schedule" each piece on a separate policy. Your homeowners has a much larger deductible, depreciates the loss typically, and you end up with a few bucks to replace your gear. The separate policy is generally a $250 deductible, covers any loss, even if you get mad and bounce something off the sidewalk. These policies are easily obtained, but you don't want to be filing too many claims on them because they carrier will drop you, so they are catastrophic in nature to protect you from a big loss.
An accountant? If you already have an accountant do your taxes, then this isn't going to add much to your annual tab. If you use a tax prep software like TurboTax, it will walk you through some simple steps and offer you options , making you aware of possible advantages and pitfalls. Sounds to me like you're not aiming for and extra 20 grand a year in photography income, so it's pretty simple. The IRS will let you depreciate your equipment, and you can write off a loss if your out go exceeds your influx, but there are rules governing loss/income ratios, and how many years you can experience losses. They, and rightly so, want to see a profit and receive taxes at some point, this isn't a scheme to shelter income. The benefits of having an extra 5 to 10K in photography income annually could be negated if that bumps you into a higher bracket and you pay your profits out in taxes.
Liability insurance? A lot of photographers don't want to pony up $500 annually for a 3M liability policy, but they are leaving themselves exposed. Many clients are insisting on being named on a policy these days to mitigate their exposure. You can risk it, if you have no assets, lots of debt, making you pretty much judgement proof, but that's not the responsible route. The policy will require that your vehicle liability limits are set at a certain level, which generally adds a hundred bucks or so to your auto premiums.
Do this stuff and "poof" you're livin' the dream, free to go out and compete with a zillion people who have spent $600 on a Rebel and are now "pro's"  ...Show more →
Excellent Advise!
And I just have to repeat what was said above, never go out on a shoot (job) without insurance! If you do you are risking your future!
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not all that fun.