How many of you are starting to get some photography jobs? (Yay!) So, if you are getting paid to do photography jobs or you want to in the future, you need to do several things to legally become a food photographer.
No matter what you shoot, the process is the same when starting a photography business. So even if you don’t shoot food, please read on.
DISCLAIMER: I AM NOT AN ATTORNEY. I AM NOT AN ACCOUNTANT. THIS POST SHOULD BE INTERPRETED AS MY OPINION AND NOT LEGAL ADVICE. YOU MUST SEEK THE ADVICE FROM A PROFESSIONAL BUSINESS ATTORNEY AND A CPA TO FIND OUT WHAT IS BEST FOR YOU AND YOUR SITUATION.
If you are getting paid to take any type of photos, guess what? You ARE in the business of photography my friend, so you better figure out the laws in your area to make sure you are doing everything by the book.
This topic is something that most photographers want nothing to do with. It’s not fun. It can be very complicated in some parts of the world and usually costs money – the business of photography.
There are several of you right now getting paid to do photography, but because you aren’t getting paid that much, or you aren’t making a profit, you are thinking you don’t have to set up an actual business yet.
I’m here to tell you – that is wrong. Our governing entities will not think of your business that way. Just because you aren’t making a profit, doesn’t mean you aren’t in business. It just means that you are not running a successful business, yet.
I am based in the US, so I am going to specifically talk about how I set up my business here. If you are in another country, things could be very different for you to set up your business, so please seek professional advice about your situation.
Table of Contents
What It Means To Become A Photographer The Right Way
Here’s the gist of what being in business means – I’m going to really simplify it. It’s obviously more complicated than this, but you’ll get the idea. It’s all about money. Usually, no matter where you are in the world, if someone pays you money to do anything, you can bet that there is one, or several government agencies who want to know about it so that they can get their hands on some of that money.
Government agencies get a lot of money by taxing individuals and businesses. So if you are making money, there’s probably some government agencies that wants a percentage of what you made.
In the US, we have several governing agencies:
- US Federal Government
- State Government
- County Government
- City Government
Then, in certain states, we pay sales tax so you will have to deal with that governing entity as well. In California that entity is called the State Board Of Equalization. In other states, there is a separate finance department that handles it so you’ll just have to google, “what office handles sales tax in the state of __________”.
Some states in the US have townships instead of counties. In England, instead of states, they have counties. In Canada they have provinces. Australia and India have states and territories. You get the idea.
When I pay estimated taxes each quarter, I am giving money to these agencies based on what I make.
Also, please know this stuff changes all the time, so what is the law one year can completely change the following year.
What Will Your Business Be Called?
Ok, now that you have decided to do photography as a business, you need to name your new business.
The easiest thing to do, which is what I did at first is simply, “Your Name + Photography”. This can be your first and last name, or just your last name + photography.
In the US, Naming your business this way means you don’t need to file a DBA (Doing Business As), or FBN (Fictitious Business Name).
Choosing a name other than your personal name + photography will require you to file a DBA, or FBN with your state. This is telling the governing entities that you are operating a business under that name. In other countries, you’ll need to look this up to see what your laws are about naming businesses.
There are a lot of considerations when naming your business. When you are figuring out your business name, see if you can get a website with that name and see what social media channels you can get with the same name. You will have to get creative here.
Another extremely important research step that is constantly overlooked (even by other coaches in photography), in the US you MUST look to see if the business name you are considering has an active US trademark using that name in the category of business you are going in. You are searching for a “Basic Word Mark Search”.
I can’t tell you how many “gurus” I’ve seen have to change their business name, or their program name because they didn’t bother to see if anyone else is already using it.
Trademarks protect you from anyone using your business name in the entire country.
DBA’s or FBN’s only protect you locally from anyone else using your business name in your county.
Do you need a business license?
Now that you have your name all figured out, you need to see if you are required to get a business license.
If you are already making money from photography, you need to research asap if you need a business license to do this where you are located.
Again, every place is different in the world. So google, “do I need a business license for photography in _____________”, put your city and state in there. Or, if that doesn’t help, google, “do I need a business license for a home based business in ____________”.
In some places, the cost of the business license is based on what you are doing. So photography will have one rate, and an attorney will have another rate.
In some cities here in the US, photographers are considered artists, and might be an exemption for paying the business tax every year. In Los Angeles, all artists must have a business license, however they are exempt from paying business tax if they are NOT doing commercial art – commercial photography.
So guess what? Taking photos for a restaurant is considered a commercial art, therefore you are not exempt from paying your yearly business tax in Los Angeles.
In Delaware, all small businesses are exempt from paying additional gross sales taxes on their business if they make under 100,000 a month so that business will only have to pay the yearly renewal fees.
My prop stylists and food stylists ARE exempt from paying business tax on Los Angeles, even though they are working on commercial art projects. They must have a license, but they don’t pay for it if they file on time every year. Very unfair for photographers, but it’s the way that it is because of the film industry here.
Side note: I ask all my stylists if they have a license. Shockingly most don’t. So I tell them they have to have one, they just don’t have to pay for it. They were always told they don’t need one because they didn’t have to pay for it. This misunderstanding of the law has been around forever unfortunately. I’ve actually helped several of my stylists get their business legit after many years.
When in doubt, just call your city and ask them if you need a license to do photography as a home based business, and how to get one. You can also ask a business attorney that works with small businesses, and they should be able to help you.
The sooner you do this the better. The longer you wait, the bigger the risk of getting caught. Then you’ll have to pay fines and penalties for operating without a license. Don’t do that!
What Will Your Tax Status Or Business Structure Be:
Now that you know whether you need a business license or not, you need to start talking to your accountant and tax attorney.
In business, you need your business team. Mine are my CPA, my tax attorney, my corporate attorney, and my business insurance agent. Ask for referrals for all of these professionals in your area. They must understand small businesses. I went through quite a few accountants before I found the one I use now.
When having a business, you really want to protect yourself as much as possible. You want your business to be separate from you. You want to protect your assets from a possible lawsuit.
So your business team should help you decided how to structure your business. Here are your current options in the US – these can change at any time by the way. The government does what ever they want, whenever they want:
- Sole Proprietor – the easiest and fastest way to start a business. It simply means that you are your business. So if someone sues your business, they are suing you. No asset protection, and higher taxes. You pay 15.3% self employment taxes on top of your income. Doesn’t need an EIN (Employment Identification Number).
- LLC (Limited Liability Company) – You are now separated from your business. If you are a single member LLC, your income will pass through the company to you on your tax return. If you have more than one partner, the LLC files its own tax return. You will also pay the extra self employment tax. This is for asset protection only – you don’t save money on taxes. Needs an EIN.
- S-Corp (Subchapter S Corporation) – This is what my business is. They have a special tax designation to save the double taxation that a regular C-Corp has to pay. When I incorporated, I saved $8000 in taxes that year. The corp tax rate is less and the individual tax rate on your tax return, AND you have asset protection. Needs an EIN.
- LLC with S-Corp Designation – depending on your situation, you and your business team need to decide if this would be better than an LLC or an S-Corp. For me personally, I have several businesses under my corporation so the S-Corp was what I needed. Needs as EIN.
Does Your State Have Sales Tax?
This one is no fun at all. Dealing with sales tax. Every state is different how they charge for this, and how you must pay it.
In California, it’s the State board Of Equalization. I had to file with them quarterly. In CA, there are newer laws in place about electric products – meaning not tangible goods. CA collects sales tax based on how many tangible goods you make and sell.
As I am no longer giving film to my clients, and I am electronically transferring images to them, I don’t have to charge them sales tax on that. I make every client sign a form acknowledging that they received my files this way to prove to the state they are getting the files electronically, and not on a hard drive (tangible good).
I also occasionally sell fine art prints. Those are tangible goods, and therefore I charge sales tax on those prints and then give that sales tax to the state.
Please google your governing office for sales tax in your own state to find out their laws about all this, and to see if you need to register with them. I suggest you make an appointment, or call them for info.
Do Not Commingle Your Personal Finances With Your Business Finances!
Now that you have your business structure sorted out – it’s extremely important that you treat your business as its own entity. Keep your monies separate!
You use your business money to pay for business stuff. You use your personal money for your personal stuff. That’s it. Super easy.
Open up a bank account in your business name. If you are using the “your name + photography” method for naming your business for now just to get started, you will most likely be told by the banker that you must have a DBA or FBN with an EIN.
THEY ARE INCORRECT. The bankers always get told that any business bank account must have a DBA or FBN to open a bank account. If they insist, then you need to insist on talking to a bank manager. I’ve done this many times when starting out because I had moved banks a few times.
If you are using a made up name for your business, then you will need your DBA or FBN paperwork for the bank to set up the account using that EIN.
Regarding moving money around between your business account and your personal account: I will sometimes loan money from myself personally to my business at times when I’m waiting on huge checks from clients, and need some cashflow. Then the business pays down that loan when the checks come in. That’s how I move money back and forth.
I am an employee of my corporation. Talk to your CPA about how to set up taking payments from your business.
I used to used to use Quickbooks for all my bookkeeping. Now I use Xero.com. I do my all accounting online. QB is fine for a business that is not doing a lot of business online with several PayPal accounts, like I have. You can only hook up one PayPal account to your QB account.
At the end of each quarter, I send my P & L statement (profit and loss) to my accountants, so that they figure out my quarterly filings due each quarter.
Please Get Business Liability Insurance!
Business liability insurance is a must. Please check out this blog post all about it. There are way too many companies trying to sell a “photography” insurance package that are a complete waste of money.
Many insurance companies have a general business liability insurance policy, but you really need one that was made for photographers, because we have our own set of insurance needs. Just because they call it a “photography insurance package” that does not mean it actually has all that we need.
If you don’t have this insurance yet, check out – Tom C. Pickard Insurance. They are not endorsing me, or sponsoring me at all. I’ve been used them for at least 20 years now.
Now I’m with Hartford and I worked with an agent for this as they had a lot of options. I moved companies because when I moved my corporate office, Tom C Pickard didn’t underwrite there.
In the insurance post, we go more in detail about business insurance, and talk about workman’s comp insurance as well. As soon as you hire someone to help you, you most likely have an “employee”, so you need to know what that means.
Hopefully, all this makes sense to you. At least now you do know some of the things you must consider, and plan for when setting up a photography business. If you are overwhelmed by this, just hire someone to help you so that it’s done properly.
If you have any questions, please let me know in the comments below.
I cover this in much more detail in the Food Photography Club so make sure to sign up on the wait list to be notified when we launch again. We have over 200 members now, and it’s so much fun.
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