# To Register or Not to Register?



## Kokennut (Feb 8, 2012)

Hello everyone,

Just trying to weigh the options of registering a photography business or not. 

What are your pros and cons to this?  Do the pros outweigh the cons? 

Thank you!

-Ken


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## Christie Photo (Feb 8, 2012)

Wow.  That's a request that requires volumes.

What are your goals in photography?

-Pete


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## MReid (Feb 8, 2012)

if you make money you need to pay taxes.
you will need a tax id number.


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## CCericola (Feb 8, 2012)

Ask the tax men. They love fresh meat. If you get caught be prepared for the butt hurt.


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## Christie Photo (Feb 8, 2012)

Well...  one can still sell services without being a merchant.  And one can still report the income without being a merchant.

This is especially true in the digital age since often times no merchandise is sold.

-Pete


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## 2WheelPhoto (Feb 8, 2012)

One of my professors told us about a guy in Tampa who had a great photography/hobby/side business for years. It was thriving.

That is until he was charged with felony tax evasion and a host of other neat federal and local charges.

One of my upcoming photography courses is "*Business Essentials for Photographers*", you may want to entertain the idea of attending such.


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## tirediron (Feb 8, 2012)

Would you like to receive a free criminal record?  Then by all means, do not register your business in accordance with local regulations.


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## Kokennut (Feb 8, 2012)

Other than not having a criminal record (haha)... What are the pros and cons that you've noticed?


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## Christie Photo (Feb 8, 2012)

The IRS is not out to make us all honest.  They operate like any other business; they have a budget and want as much return as possible.

State and local ordinances are different.

I can only speak of Illinois law and that of Kankakee County and City of Kankakee.  

If you are not selling merchandise (albums, prints, frames, etc.), no tangible product, then you are selling a service.  For instance:  I'm a semi-pro musician.  I work a music director at a church.  I do report the income and I do pay taxes on that.  But I have no other tax liabilities for this.

I'm a bonafide photographer.  It's my primary source of income.  On sales where I complete a job without prints, framing, photo processing, etc., I need only pay tax on the income.  The same Schedule C I file with the IRS goes to the state of Illinois.

As for Retailers Occupational Tax (Illinois sales tax), I pay very little as most of my work no longer includes merchandise.

This stuff isn't all that tough.  It scares us because the state, even when they're wrong, has seemingly unlimited measures to hurt us.  You really have to be a blatant scofflaw before anything too terrible occurs.  First, they want anything owed to them.  It's only when they feel they're owed and you don't pay that life gets pretty rough.

-Pete


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## mjhoward (Feb 8, 2012)

The first thing you need to do is read up on the 'Hobby for Profit' laws because you may not have an option.  These laws cover what is required for reported profits and taxes collected from a hobby.  In some (very few) cases you're allowed to claim losses.  There are also guidelines that distinguish when your Hobby is no longer a 'Hobby for profit' and is now a Business that must be registered as such.  As a legal and legitimate business in compliance with the laws, you will have to collect and remit taxes to your Department of Revenue and adhere to other regulations.

If you DO have the option of simply reporting profits on Schedule C as an individual, one benefit of having something like an LLC is that it protects you and your personal property from damages that can occur from your business.  For instance, if you get sued, they can't go after your house... things like that.  There are also other tax related benefits that you may not necessarily be entitled to if you are operating as an individual.

Reading is your friend.  You can start here: Business Entities - California Secretary of State


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## tirediron (Feb 8, 2012)

Having re-read your OP, can you clarify something?  Do you mean should you start a legal business, or should you legalize an existing business?

There is no downside to operating a registered business.


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## Christie Photo (Feb 8, 2012)

tirediron said:


> There is no downside to operating a registered business.



Agreed.

However, if you have a store, that's when city ordinances kick in, along with a few federal regulation considerations.
This is stuff like signage, fire inspections, ADA, any local licensing and so on.

In either case, you'll have to keep the same records of monies spent and received.

If you operate as a local business, you have access to your Chamber of Commerce or any other business community organizations.  Even some professional memberships in photography require this; some vendors too.

But back to the question:  What is your goal?  Do you want this to be your primary occupation?  

-Pete


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## 2WheelPhoto (Feb 8, 2012)

FYI: Bestbuy and FB are still cranking out pro photographers daily


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## Kokennut (Feb 8, 2012)

Well, ultimately, I'd like to have a studio some day. But for now, working out of my apartment is fine and I have a full time job I'm working too. I'd like to start a legal business and not be a "hobbiest"  I don't mind paying taxes as long as it doesn't put me in the red. For instance, if I only make a little bit of money in one year and my tax fees for all the forms cost more than what I made.. that would put me in the red.


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## KmH (Feb 8, 2012)

Kokennut said:


> I don't mind paying taxes as long as it doesn't put me in the red.


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## mjhoward (Feb 8, 2012)

Kokennut said:


> For instance, if I only make a little bit of money in one year and my tax fees for all the forms cost more than what I made.. that would put me in the red.



There arn't really a lot of additional tax forms if you start your business as a Sole Proprietorship LLC.  Your DoR will send you out a form to report your revenue/collected taxes every quarter (can sometimes be monthly or yearly).  You just fill out the form and send it back.  At the end of the year, you'll receive a 1099 (I think this is the form #) and you'll put the appropriate information in Schedule C on your personal Form 1040 along with your usual tax info.  So basically it boils down to your accountant/tax person will only have to add a $ figure to Schedule C.

Other expenses include your business registration fee or articles of organization fee (for KY it was $40) and your annual reporting fees (for KY $15).  

Did you read through any of the link I gave you?


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## Kokennut (Feb 8, 2012)

Yes I have been reading!  Thank you so much for the help! There's a whole lot more than I thought when it comes to starting a business. I've got a lot to do ahead of me! But I'm sure after I do this, good things will happen for sure.  I really appreciate the help and advice!

-Ken



mjhoward said:


> Kokennut said:
> 
> 
> > For instance, if I only make a little bit of money in one year and my tax fees for all the forms cost more than what I made.. that would put me in the red.
> ...


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## radiorickm (Feb 8, 2012)

tirediron said:


> There is no downside to operating a registered business.



This is not necessarily true. I am at a moral delema whether I want to (Create) my new photography business. Once you begin advertising your services, you are legally obligated to some things by federal law.

Lets say for instance (and this is JUST an example) that a Gay couple of 2 men come in and request your services to photograph their wedding. You are morally, religiously, and ethically opposed to this and you say you are not interested.  If that is the reason, then you are in violation of Federal law. I would like to be able to choose my clients. I don't like the federal government telling me I have to do this. SO, I can continue to enjoy my hobby by doing these things for free, and not advertising etc.... and have my choice. 

There is good and bad to everything.


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## 12sndsgood (Feb 8, 2012)

radiorickm said:


> tirediron said:
> 
> 
> > There is no downside to operating a registered business.
> ...




noticed when you said gay couple you called out 2 men. does that mean if it was 2 women you'd be down to take there photos lol.


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## tirediron (Feb 8, 2012)

radiorickm said:


> tirediron said:
> 
> 
> > There is no downside to operating a registered business.
> ...


Agree totally.  Let me rephrase:  If you're going to charge, then there is no downside.  If you want to use your skills to help out friends and family, etc and all you take in return is costs and the odd free dinner, great.  If you're going to charge however...


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## Bitter Jeweler (Feb 8, 2012)

radiorickm said:


> tirediron said:
> 
> 
> > There is no downside to operating a registered business.
> ...



You should probably stay off the internets. There's tons of gay on the internets.


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## o hey tyler (Feb 9, 2012)

radiorickm said:


> You are morally, religiously, and ethically opposed to this and you say you are not interested.  If that is the reason, then you are in violation of Federal law. I would like to be able to choose my clients. I don't like the federal government telling me I have to do this. SO, I can continue to enjoy my hobby by doing these things for free, and not advertising etc.... and have my choice.
> 
> There is good and bad to everything.



It's depressing that you'd even use that as an example. 

Although, California had a huge win the other day. Someone could probably move out there and corner the gay wedding photography market... If they weren't opposed to it because some incorrectly interpreted ancient scripture told them to be.


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## Bitter Jeweler (Feb 9, 2012)

Well truth be told, I have a duplex I don't rent out because I can't discriminate against bigoted, religious, pro life, republicans, with children.
So I have no room to talk.


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## Christie Photo (Feb 9, 2012)

radiorickm said:


> tirediron said:
> 
> 
> > There is no downside to operating a registered business.
> ...



Wow.


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## Kokennut (Feb 9, 2012)

I totally understand... and that's a great point you have there. Even though there is a lot of talk about Gay marriage in the news, it doesn't necessarily mean that most of the nation is as understanding about the issue.  I thought that California would have been a clear front runner for gay rights, but sometimes we forget that the San Francisco Bay Area is just a small pocket in a large state.  Even more surprising, there's not a lot of people who approve of gay marriage in the Bay Area.  So there will be some discrimination and apprehension to the idea of two men or two women having a ceremony anywhere you go for now. I think that example is quite valid Radiorickm.  But can't you still have a choice even though you have your own business?  I hear people telling others to get out of their stores all the time. 





radiorickm said:


> tirediron said:
> 
> 
> > There is no downside to operating a registered business.
> ...


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## Bitter Jeweler (Feb 9, 2012)

Kokennut said:


> But can't you still have a choice even though you have your own business?  I hear people telling others to get out of their stores all the time.



Can you do the same for blacks, latinos, women...

It's ****ing discrimination. Period.


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## Christie Photo (Feb 9, 2012)

Bitter Jeweler said:


> Kokennut said:
> 
> 
> > But can't you still have a choice even though you have your own business?  I hear people telling others to get out of their stores all the time.
> ...



Agreed.

But, yeah...  one CAN turn away gays, blacks, etc., probably without fear of any sort of government or legal retribution.  And eventually, NO gays or blacks and so on will call on you.  Nor will anyone like Bitter and myself and the millions who find this to be a sad, ignorant, disgusting way to conduct business...  or live one's life.

-Pete

BTW, Bitter...  I'm religious, pro life, republican, with children, but not so much a bigot.  Any room at the inn?


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## Bitter Jeweler (Feb 9, 2012)

Christie Photo said:


> BTW, Bitter...  I'm religious, pro life, republican, with children, but not so much a bigot.  Any room at the inn?



hahaha...no!
Actually it's the children part. I live in the duplex, and was misinformed by my elders that urged me into buying a duplex...what a great investment they are...yeah, maybe 30 years ago. I was told that things are different when you are owner/occupied. Until I talked to a lawyer. ALWAYS TALK TO A LAWYER!!! So, yeah, the lower unit has been vacant for 7 years. But now I have a guy who was down on his luck living there for free in exchange for renovating it. And when it's done, it'll go on the market. I'm out!

Sorry, I am not fond of children. It's been bad enough with the neighbors kids, riding their big wheels in my driveway and ramming into my garage door. They've used my my water and sprinkler to play in on hot days. In my yard even! It's not just the kids that are to blame. It's the parents too. So I said to myself, yeah, no thanks.

And no, I don't exclude people from my life for opposing views. Well, unless you say things like "the only reason I won't start a business is because I can't discriminate". :er:


I want to add, I realize how hypocrital that sounds, but understand it's not the kid thing that was my decision not to rent. It was the drive by shootings, gang wars in my neighborhood, drug dealing, and the realization I am not cut out to be a landlord. The last bit was the big thing.


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## Kokennut (Feb 9, 2012)

It's tough being any one these days.  <sigh>  well... it seems to be getting better.... little by little.  I only turn people away who are rude. But I getting back to the topic, It seems like there's no real major down side to creating a business.


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## Christie Photo (Feb 9, 2012)

Bitter Jeweler said:


> I want to add, I realize how hypocrital that sounds, but understand it's not the kid thing that was my decision not to rent. It was the drive by shootings, gang wars in my neighborhood, drug dealing, and the realization I am not cut out to be a landlord. The last bit was the big thing.



Umm..  did you shoot these?  Is this the view from you window?

-Pete




For the record:  My kids are grown and long gone.  The babies turn 33 this year.


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## Bitter Jeweler (Feb 9, 2012)

Christie Photo said:


> Umm..  did you shoot these?  Is this the view from you window?
> 
> -Pete


 Yes, and Yes. 

Basically, I gutted the lower unit and redid the plumbing and some other stuff, when this stuff happened, and I said "screw it", we won't be able to keep tennants with this going on. 

When that stuff happened we started going to the neighborhood meetings. Big mistake! We just learned MORE bad stuff that goes on. :shock: Sometimes ignorance is bliss.

It's been much better of the last few years though.


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## o hey tyler (Feb 9, 2012)

Believe it or not... The "Gang Wake" video you posted is exactly how funerals/wakes are carried out throughout the state of Maine. 

Actually, don't believe it.


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## radiorickm (Feb 10, 2012)

Ok Guys and gals....

I used that as an example for a reason.....not involving me. It was a major Court case lost by a photographer in my home state. She lost her @$$ in the law suit.

There are some things I miight choose NOT to engage in, but my points was that I don't like the federal government forcing me to do something that I don't want to, or feel confortable doing.   


Rick


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