after years of searching for photography as an avid amateur photographer, I decided to finally take the plunge and become a professional. That he had all the necessary organs of camera, lenses, flashes and other ranked teams, and have my own business means future of photography shopping would be deductible from taxes. A smart, correct decision?
the short answer, for me at least, was “Yes.” The long answer, however, was, “Depends on how long you want to spend running around and investigate the requirements.”
Fortunately for you, I’ve done already in North Carolina and am willing to share the results (for this State, at least!).
for the purposes of this article, I guess the following things are true:
1. You will be operating this business in the State of North Carolina.
2. you have knowledge of photography to qualify as a professional photographer (which is another article by itself).
3. you have done the necessary research to determine if you have the time, energy, the basis of potential customers, and business plan for your new business succeed (once more, this topic is another article by itself).
the first step was to determine what type of business entity to be. After doing much research online, it was a little confused, until a CPA explained it to me: there is a difference between their LEGAL status and their tax situation. She recommended my photography business a LLC (limited liability company), but the tax file as sole proprietorships.
as with the different options, there are positive and negative aspects of each option. State LLC would protect me from personal liability in the event of a lawsuit, which was important to me. The documentation is very easy to prepare and present, that it is also good because he wanted to take care of everything myself.
tax filing as a single owner would be very simple: just attach an annex C to my personal income tax return each year. Although this marital status is fairly easy, unique owners pay a tax slightly greater than the S companies.
file as an S-Corp, however, involves more paperwork and submission of quarterly tax rather than a program C with my annual statement. It was not interested in that much paperwork, the unique status of owner seems well. If my business starts to make so much money that I am interested in a lower rate of tax, I always change my status to an S-Corp
now that it has determined my legal and fiscal status of State, I had to ask for my LLC with the State of North Carolina. It is send a check for $125 to the Secretary of State, along with articles of organization, which you can download and fill in from your website.
it takes about 7-10 days of their state back confirmed, even if they include a note and your email address, will email to you that will save you a few days.
the State of North Carolina considers photographers one of those lucky occupations that require a license from the State privilege. It’s an annual license issued to the person, not the business, so if you end up working for a company’s different picture in the future, you don’t need a second license of that year. A privilege license is $200, of the Bureau of revenue of North Carolina. This must be done in person, but the Department of revenue has offices throughout the State, so there is probably one in a city near you.
while he was there, also have received a State tax ID. (Fortunately) this is free and will be very useful because armed with this important issue, no longer must pay taxes on the purchase of items for my business (assuming I am a seller of North Carolina shopping; you obviously do not pay sales tax on everything in the purchase of a seller out of State, as when buy lenses online).
the employee’s income from NC and explained to me that two forms will have to be mailed in the revenue CN Office each quarter. One is a way to explain what its earnings for the quarter were and how much tax you to your customers. You need to include a check for the amount of tax. Another shows the equipment purchased for your business quarter and not paying taxes. Need to include a cheque for 1% of the total (well, at least is less than paying the full sales tax on their purchases). This includes all cameras and lenses to computers, printers, ink cartridges, paper, etc.
my clients sales tax load is a little confusing in North Carolina. The law is not clear, and demands that have been discussed in court State have conflicting results. It seems that it does not need to collect taxes on services such as the session fees, unless the customer ends up purchasing prints from the session. Of course you always hope it and assume the customer will buy impressions, but you never know with certainty. To be sure, you should go ahead and they charge taxes on session fees, assuming that they buy prints.
always needs to collect taxes on sales for products sold. So any prints, albums, or other products that they sell to your customers always must include sales tax.
the tax rate that is applied depends on where the customer took possession of the goods. If the customer lives in Gaston County and asked that the impressions of your mail, applies the rate of Gaston County. If the bride decides to swing by my house in Charlotte to collect them personally, the Mecklenburg County rate applies.
tax was by far the most complicated part of the business process. Fortunately, employees of revenue CN friendly office and gave me several “sheets, cheat” sample forms and (best of all) their numbers to call with questions.
If you want that your North Carolina State tax ID on behalf of your business, rather than his own name, need an IRS employer identification number. Initially I was confused by this, because I was not planning to employ anyone other than I, but it turns out that the employer identification number has nothing to do with the employment of any person. Luckily was free and managed easily by phone while I waited in the lobby of the office of State revenue.
now is the question of where you live. I am a resident of Charlotte, so I’m in Mecklenburg County. Fortunately, Mecklenburg County recognizes the privilege of the State license, so it was not necessary to obtain an additional County business license.
However, it was, you must obtain a custom home occupancy permit from the zoning office. It’s a single permit that allows me to work from home. It’s a permission of life; However, it only applies to this particular address. If you decided to move to a different House in a few years, I will have to get a new permit. Cost $125.
then needed a business checking account. I went directly to Wachovia, since they already manage our personal bank accounts and wanted everything in one place for your convenience. Wachovia needs copies of my privilege, my EIN license and my ID state tax, as well as the normal documents for a new account as my driver’s license. In about a week, I received my checks and checks for the account card. This is highly recommended by the CPA that I visited, in order to separate business and personal expenses.
the last thing he needed was safe business. It is recommended in addition to any liability coverage of owner or umbrella that already has. It is not too expensive (less than $200 per year) so go ahead and get it. Any insurance agent will be able to go over the options with you. Business insurance will not only cover your computer in the event of these expensive lenses or cameras get damaged, but also help in the event that a guest shot on one of your lightstands at a wedding, for example.
some notes in the margin: If your business is an LLC, is legally obliged to have the initials “LLC” or the words “Private limited company” in the name of the company. This makes clear to all customers and potential customers that you are an LLC. Also, if you do not keep your business and personal expenses separate, you will lose the protection of an LLC (i.e. your personal heritage is vulnerable in the event of a claim). This risk – do not keep everything separate and well documented!
best of luck with your new venture! I recommend you to visit the website of business development of State of North Carolina and call their hotline; they gave me many tips that the CPA did not mention, and was free to boot! Fortunately there is a lot of support for people who start their own businesses. It is free, and that these people know what they are talking about – please take advantage of it!