# Legal or Illegal?



## CourtneyCollins

I guess that is my question. I'm totally sorry if this has been posted somewhere, but I am unable to find the right answer....

I am 18 and photography is more of a hobby for me, but I have had SO many people ask for me to take their photographs and how much do I charge. I recently started getting into trying out studio lighting and that turned out to be a hit for me. I have had two sports teams request for me to take their pictures.... Now my question.. Is it illegal for me to take money from them? I usual do not even ask for money, but I have had so many people telling me it's silly for me to be doing this for free.

No, I do not have a business and no I will more than likely not be making more than $3,000 a year from this. I've always been scared to charge people for my pictures because I do not know if that is legal for me to do or not.....


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## 480sparky

Is it illegal to charge money for taking photos? 

Two words:  _Heck_ and _No_.

That said, there are other considerations.  If you need a license, permit, insurance, sales tax etc. for starters.  But what you're wanting to do is the basis of the *Free Enterprise *system.

And you can certainly do things that would _make_ it illegal.  Say, you take their money and never show up to take the photos.  Or refuse to deliver any images to them.


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## Vtec44

They pay you for your services, nothing illegal about that.   When you accept money, there are expectations.  You want to make sure the expectations are clear on both sides.  Then the question of tax since there's now money involved.


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## CourtneyCollins

Vtec44 said:


> They pay you for your services, nothing illegal about that.   When you accept money, there are expectations.  You want to make sure the expectations are cleared on both sides.  Then the question of tax since there's now money involved.



The whole tax part is what scares me. I don't understand it when it comes to taking someones pictures & printing off their photos afterwards.


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## Tailgunner

If you accept money for work, you ow taxes. You can just get a DBA (doing business as) license through the court house using your SSN. It's simple. Then you can report everything. 

Now you're going to run across some folks who are absolute and strew reporting every cent. I on there other hand don't see reporting anything under a grand but thats just me.


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## Gary A.

Depending on how much you make and how you set yourself up and how you carry out your transactions ... you can operate either illegally or legally.


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## 480sparky

CourtneyCollins said:


> The whole tax part is what scares me. I don't understand it when it comes to taking someones pictures & printing off their photos afterwards.



The problem with taxes is you're probably going to end up losing money on the deal from a business standpoint.  Sure, you'll have income, but you'll have deductions as well.  So let's deduct your camera... say it was $1000.  And you charged $500 for the work & images you provided.  You have a net loss on your Schedule C of $500.  

Sure, that lowers your tax liability, but if you continue to lose money, the IRS may well consider your little business venture a 'hobby' and disallow all your deductions.  Uncle Sam expects you to eventually turn a profit.  If you continually lose money year after year, you may find yourself with a nasty letter from the IRS.


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## KmH

Being 18 you are now legally considered an adult and can enter into contracts, both verbal and written.

To find out what is needed be a legal business where you are in Oklahoma check with your local City or County Clerk and the State Of Oklahoma.
As mentioned, the city/county where you are will likely require your business have liability insurance to be a legal business.

If you are self-employed you are required to file a US Federal Income tax return if you have more than $400 a year of self-employment  income.
Being self-employed, you also need to pay FICA taxes on income you earn.
If you work for someone else and are an employee, your employer pays 1/2 of the FICA taxes
Being self-employed you pay all of the FICA taxes owed on income you make from your self-employment.
Another aspect of being self-employed is that you are required to make quarterly federal income tax payments.

Business or Hobby Answer Has Implications for Deductions



> Oklahoma Tax Commission
> Oklahoma resident individual(s) are required to file an Oklahoma income tax return when they have sufficient gross income to file a Federal income tax return.



If self-employed the state of Oklahoma will also expect you to collect and forward to them any Sales tax they are due for products, like prints or digital files on a disc, you sell.

Oklahoma also has Use taxes and likely require a self-employed person to also pay unemployment insurance taxes.

Once every 3 months or so I hear about another illegal business here in central Iowa that got caught.
It's usually the state that finds out first and sends a bill for income, sales, and use taxes they think they are owed. The state tacks on whatever penalty and fine dollars they decide need to be assessed.


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## imagemaker46

Two choices, keep a record of all income and add to your tax forms. Second choice take cash and don't declare it.  I believe there are a lot of people in your position, and not just in photography that are working under the table.  As governments take more and more from us, the underground cash market becomes more attractive.  You're not making tens of thousands off this.  There are also thousands of people selling on ebay that never declare the income, it's just a hobby.  

If your income starts to climb, it would be in your best interest to record and pay the taxes, chances are they won't be much.


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## Designer

CourtneyCollins said:


> Is it illegal for me to take money from them?



Make some phone calls.

Call a lawyer who can guide you through the procedures for setting up a business.

Call your municipality to see if you need a license. 

Call the fedgov and your state to see what you have to do to report income and pay taxes.


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## runnah

Designer said:


> CourtneyCollins said:
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> Is it illegal for me to take money from them?
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> Make some phone calls.
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> Call a lawyer who can guide you through the procedures for setting up a business.
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> Call your municipality to see if you need a license.
> 
> Call the fedgov and your state to see what you have to do to report income and pay taxes.
Click to expand...


Don't get on people's radars!

If you don't expect to make more than a couple grand just do it on the side and keep it quiet.


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## 480sparky

KmH said:


> ..............It's usually the state that finds out first and sends a bill for income, sales, and use taxes they think they are owed. The state tacks on whatever penalty and fine dollars they decide need to be assessed.



And usually it's something like - Taxes due: $27.83.  Penalty: $1,500.

And the penalty is not assessed due to your actions, it's due to their just plain being greedy.


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## runnah

I always like to think my tax dollars go to something helpful like building a school or a bridge, but chances are they go to some fat politician's bar tab.


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## Designer

runnah said:


> I always like to think my tax dollars go to something helpful like building a school or a bridge, but chances are they go to some fat politician's bar tab.


I don't have any delusions about where my tax dollars go, but not paying taxes that are due is not the way to fix this country's political ills.


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## runnah

Designer said:


> runnah said:
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> I always like to think my tax dollars go to something helpful like building a school or a bridge, but chances are they go to some fat politician's bar tab.
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> I don't have any delusions about where my tax dollars go, but not paying taxes that are due is not the way to fix this country's political ills.
Click to expand...


No? Vote with your wallet I always say...


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## Designer

I understand the impulse completely, but what is needed is to elect honest politicians.


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## runnah

Designer said:


> honest politicians.


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## Designer

I know, right?  LMAO


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## 480sparky

Scurries off to Google '_honest politician_'...............


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## Designer

I think there are some.  Two or three maybe.


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## Gary A.

While I find government spending is often wasteful and misguided ... I really don't mind the paying of taxes. I think most/some/enough of the money directly and indirectly benefits our society.


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## Designer

Gee, Gary, I don't know where to begin....


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## Overread

How about we DON'T begin a politics talk (unless you guys want to sign up and take to the subscribers section where you can)


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## pgriz

Well, whether we are ok or not with paying taxes,  and whether or not they are well spent, the simple fact is that IF the revenue department of each jurisdiction decides that you ARE operating a business, then you have revenue, and you owe them their cut of the revenue (sales tax), and profit (income tax).  Flying under the radar works up to the point they DO see you, and then life gets really complicated.  Doing the business thing "legally" is also complicated, but less so than if gubermint decides you have what they think is their's.


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## Overread

I'd ask yourself "do you want to make this a business - a serious one" 

If the answer is even a tentative yes then I'd check out the full tax side to things - call up the local council as they are sure to have small start-up business advice which will give you a lot more information (accurate to your area). This basically means that you can start off on the right foot - as you mean to continue and avoids having that ugly bit where you're suddenly trying to work out how much you did take over the X amount of time you didn't pay and slowly turned into a profit working company etc...

If the answer is no and you're only going to make a tiny bit here and there chances are its not worth worrying about. Technically you're supposed to declare every single exchange - in reality you won't and most people don't when the values are small and one-off events. 

It is risking it and if in doubt ask for formal professional advice so that you know the full ramifications - eg find out how much the min-earning threshold is for paying tax in the first place and what criteria it all fits under; you might find you can legally take a modest amount without any legal worries.


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## joeymas

My advice would be to call photography your hobby, and do not be afraid to accept a cash "tip" for helping out a friend.

If you start making so much money that IRS would take an interest... Well then my friend, you are now a pro. Incorporate - Good on ya!


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## 480sparky

Given that the IRS is going after people who bring in $200 from a garage sale................

....... as well as their 8-year-old who made $12 selling cookies and Koolade during the sale...............

I would say you should be upfront about it on your tax return.


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## runnah

480sparky said:


> I would say you should be upfront about it on your tax return.



I will when they are upfront about their spending...


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## 480sparky

runnah said:


> 480sparky said:
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> I would say you should be upfront about it on your tax return.
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> I will when they are upfront about their spending...
Click to expand...


I wasn't aware the IRS had anything to do with the nation's budget. I thought that was up to Congress.


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## Nevermore1

Check out your local and state govt small business offices.  A lot of states have offices specifically to answer questions like these and they can let you know if a business license and whatnot is needed.  As for taxes I can't provide much help on that.  Somehow my sitter is able to charge based on how you pay her, if you pay cash you pay 30% less (the amount she would have to pay in taxes) than if you give her a check.  Some people could say she's doing it "under the table" but she is fully licensed, registered and insured and has inspections by the County periodically so I don't know how she can get away with telling the State or IRS that she isn't making any money when there is a log of all the children in her care with the county.  She gets $1400 a month just from me and that's for 1 1/2 kids, she has 4 other kids so she doesn't make a small enough amount to not have to file.


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## JacaRanda

Been paying taxes for approximately 34 years.  I can't remember ever having any control over where or how my tax dollars were spent.  It's not new and it's not just recent.


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## MSnowy

Three words CASH CASH CASH!


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## runnah

L


480sparky said:


> runnah said:
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> 480sparky said:
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> I would say you should be upfront about it on your tax return.
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> I will when they are upfront about their spending...
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> Click to expand...
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> I wasn't aware the IRS had anything to do with the nation's budget. I thought that was up to Congress.
Click to expand...


I am more of a big picture guy, I let those below me worry about such trivial details.


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## JacaRanda

MSnowy said:


> Three words CASH CASH CASH!


 
Old enough to know that this is almost always the final answer or reason.


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## MSnowy

JacaRanda said:


> Been paying taxes for approximately 34 years.  I can't remember ever having any control over where or how my tax dollars were spent.  It's not new and it's not just recent.


 
Well see there's the problem. Run for office then you'll have a choice, plus more friends and enemies then you can count.


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## JacaRanda

MSnowy said:


> JacaRanda said:
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> Been paying taxes for approximately 34 years.  I can't remember ever having any control over where or how my tax dollars were spent.  It's not new and it's not just recent.
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> Well see there's the problem. Run for office then you'll have a choice, plus more friends and enemies then you can count.
Click to expand...

 
I can't.  I inhaled once.    Hmmm, but it was before camera phones.   I may have a chance.


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## MSnowy

JacaRanda said:


> MSnowy said:
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> JacaRanda said:
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> Been paying taxes for approximately 34 years.  I can't remember ever having any control over where or how my tax dollars were spent.  It's not new and it's not just recent.
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> Well see there's the problem. Run for office then you'll have a choice, plus more friends and enemies then you can count.
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> I can't.  I enhaled once.    Hmmm, but it was before camera phones.   I may have a chance.
Click to expand...

 
I can't believe that "once "


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## JacaRanda

MSnowy said:


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> Been paying taxes for approximately 34 years.  I can't remember ever having any control over where or how my tax dollars were spent.  It's not new and it's not just recent.
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> Well see there's the problem. Run for office then you'll have a choice, plus more friends and enemies then you can count.
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> I can't.  I enhaled once.    Hmmm, but it was before camera phones.   I may have a chance.
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Click to expand...

 
Yes, only once.  And that's because someone bumped into me, or I slipped or something.


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## vintagesnaps

Excuses, excuses... lol


It seems to vary state to state, where I live you have to make a certain amount per year before you need to report/pay tax on it (which is why kids can cut grass or babysit or people can do a yard sale and probably not make enough to worry about it). I'd suggest you look at your state's website so you can make an informed decision.

One time a summer job I had for whatever reason hadn't withheld tax and I later had to pay the tax that hadn't been withheld (seemed to be a piddily amount but not piddly enough I guess). I don't think you'd want to end up with a lot of back taxes to pay, probably just as well to find out so you know.

If you think at some point you might want to make money with your photography you could start looking at business resources for photographers thru organizations like PPA or American Society of Media Photographers. If nothing else you'd know enough to be able to let your friends know there's more to it than they probably realize for you to be paid for your photography.


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## MSnowy

JacaRanda said:


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> Well see there's the problem. Run for office then you'll have a choice, plus more friends and enemies then you can count.
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Click to expand...


It's going to be interesting when that first person from Colorado runs for president


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## JacaRanda

Click the begin link to start the interview.  Do you need to file or not.

Do I Need to File a Tax Return


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## vintagesnaps

I worked for a county agency, you should see it from that side of things!  Talk about nitpicky... but at least we were accountable for all the funding etc. All it took was a bunch of nincompoops from a different agency to be lax about their mileage reimbursement, then decide to go out golfing when they were supposed to be working - and then to have a TV crew following them around.  Seems like it's always a handful of nitwits that mess things up and that's what we hear about, while most people are doing their jobs.


Uh-oh, I can't get that link to work... is a lightning bolt headed my way? lol I'm going to pay my taxes, really I am!


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## Karsyn Taelyr

NOPE! Do it!  Once you start making a lot more money or get into weddings (or just jobs that are super lucrative) I'd make your business a little more official but for now just do it under the table!


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## sm4him

OP: I'm…ummm…a few years over 18  and have pretty much the same dilemma these days.  

The first thing you have to decide is whether you WANT to be in the business of photography. If that's something you want to pursue, then I'd suggest you do RIGHT from the beginning--do your research, get a license AND insurance, and LEARN what is going to be required of you at tax time.  There are a lot of resources that can help with that; others have listed some good links.

Or, like me, you may decide, you just want to DO photography. I want to be as GOOD as a "professional" (yeah, yeah, I know, "what's a pro?" Well, this is MY response, MY definition of pro, lol--and that means someone highly skilled), but at least right now, I do NOT want the hassle of running a business. The cons, for me, currently outweigh the pros of setting up a business.  To be honest, that stance may change for me in the coming year or so, depending on how some things work out. But for now, I'm still good with being an amateur who produces quality work (well, I'm still aiming for that last part, but I've got the amateur part nailed).

To date, my approach has been to simply not take payment for "jobs" I do.  Should the "client" insist--and yes, they so often DO--here's what I do:

1. I explain to them WHY I don't charge. I simply tell them what we're discussing here: "If I charge you, I become a professional.  That means I gotta pay taxes on what I make. And get a license. And insurance. And backup equipment. Then I gotta do bookkeeping, and marketing.  And that sounds like less fun than having all my teeth ripped out with a screwdriver, so how about you just let me have fun and take photos for you?"

2. If #1 doesn't work, then I suggest a barter. How about I take these photos for you, and YOU…give me a free meal, provide free admission to an event, etc.--whatever is appropriate for both you and the client.

3. If they STILL insist on paying you, take as little as possible. When you end up taking that money, then yes, you're faced with the dilemma "do I pay taxes on this?"
Well, legally, YES, you do. Whether you REPORT it or not is the decision you have to make. Honestly, if it's cash, and less than $500 or so, the CHANCES are that nobody is ever, ever going to know or care.  How big a risk taker are you? 
Me, I like my integrity. So, if I make money, I report it. So far, I've not made enough in a year to amount to anything, and so I've been able to simply report it in "miscellaneous income." I'm not sure what the upper limit of that is--I just know that every year, I ask "my accountant" (haha, I just like to SAY that! "MY accountant." Okay, I ask this friend of mine who is an accountant, but whom I do not pay for services…) whether the amount I made can be reported there and he says yes.


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## JacaRanda

I put in age 19, and basically took no credits for anything or any year.  Self employed and made less than 400.  Single etc.

 Result
*Answers to Your General Filing Questions*
*Do I need to file a tax return for 2014?*
*You are not required to file a tax return for 2014
You should file a tax return for 2014*
The return may generate a refund


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## dennybeall

Conversation to answer the question should start with "You pay taxes on profit, not gross. " Small occasional jobs rarely result in a profit. Take the money. Write all the in and out in a journal and worry about it in March of next year. Even when you try to make a profit it ain't easy!
Some jurisdictions don't have sales tax on certain services.


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## curly

If someone were to buy equipment to start up a venture and applied for a DBA license after buying said equipment, but it was in the same tax year, would that be deductible on that year's return?


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## dennybeall

Licenses and taxes have nothing to do with one another. There is no relation except the costs of any licenses are tax deductible.
Well, not exactly true. The governments check licenses to see who may need to file tax returns


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## curly

dennybeall said:


> Licenses and taxes have nothing to do with one another. There is no relation except the costs of any licenses are tax deductible.
> Well, not exactly true. The governments check licenses to see who may need to file tax returns



I was meaning could the equipment (not license) be deducted on taxes as a business expense if the license was filed for after equipment was purchased but within the same tax year.


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## 480sparky

You deduct your equipment and license costs the same tax year you purchase them.  So if you purchase a license this year, or buy a piece of gear, you will deduct them from your 2015 taxes you file in 2016.


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## unpopular

Many local community colleges or public libraries offer what are called "small business incubators" which will offer clinics or even one-on-one mentoring for just this sort of thing.

But if you're getting clients and studio lighting makes intuitive sense to you, there's no reason to limit yourself like this! Take some business classes and open shop!


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## b_twill

I am not a tax expert and I don't play an expert in commercials.  
That being said maybe you can just report your income as a hobby and not worry about it.  I would still set up a bound ledger showing who, when and how much to document your occasional endeavors.  Just in case anyone ever asks.
This may help the tax issue a bit. Business or Hobby Answer Has Implications for Deductions
Otherwise in lieu of cash, print out some business cards and ask that they pass them along.


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## KmH

Read that Business/Hobby IRS link above carefully.
It is a good idea to hire a qualified accountant or CPA to do your business taxes for you.

If you deduct equipment purchased this year, and then do not make a profit in 3 of 5 years (2015, 2016, 2017, 2018, 2019) expect to the IRS to retroactively declare your 'business' a hobby and disallow all the business deductions you have claimed in all those years.

Of course the IRS will expect immediate payment of the back taxes due and add any penalties they deem appropriate.


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## Thad Pannell

CourtneyCollins said:


> I guess that is my question. I'm totally sorry if this has been posted somewhere, but I am unable to find the right answer....
> 
> I am 18 and photography is more of a hobby for me, but I have had SO many people ask for me to take their photographs and how much do I charge. I recently started getting into trying out studio lighting and that turned out to be a hit for me. I have had two sports teams request for me to take their pictures.... Now my question.. Is it illegal for me to take money from them? I usual do not even ask for money, but I have had so many people telling me it's silly for me to be doing this for free.
> 
> No, I do not have a business and no I will more than likely not be making more than $3,000 a year from this. I've always been scared to charge people for my pictures because I do not know if that is legal for me to do or not.....


One thought have some sort of a contract


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## dennybeall

There are significant tax advantages to having a small business. Since there are so many advantages there are a bunch of rules to keep folks from taking too much advantage.
It's well worth your time and research to look into this aspect of your photography. If you have other income it can be even more beneficial to you.
Think about a two week photography vacation to the mountains and it can be almost 100% tax deductible if you do it right.
If you really try to make a profit it's not a hobby.  Not actually succeeding is not a tax problem.


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## Vtec44

Holy crap, what's this thread about again??? lol


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## W.Y.Photo

Vtec44 said:


> Holy crap, what's this thread about again??? lol



Evading Tax Evasion

I like this thread a lot. It's extremely helpful.


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## mandi_stardust

Contracts are your best friend


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## dennybeall

This is "The Aspiring Photographers" area, isn't it?


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## W.Y.Photo

Aspirations need to meet with reality at some point


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