How many of you are starting to get some food photography jobs? (Yay!) So, if you are getting paid to do food photography jobs or you want to in the future, you need to do several things to legally become a food photographer.
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 food photos, guess what? You ARE in the business of photography, 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. In this post, we are going to talk specifically about the business of food photography, as our little world is a bit different from other photography businesses.
I am based in California, so I am going to specifically talk about how I set up my business. 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.
What It Means To Become A Food 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 get the idea. It’s all about money. Usually, no matter where you are in the world, if someone pays you money to do work, 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 California we pay sales tax so I have to deal with the State Board Of Equalization as well.
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 food photography as a business, you need to name it.
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.
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. My prop stylists and food stylists ARE exempt from paying business tax, 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, 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.
Here is the link for getting a business license in Los Angeles County
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.
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 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 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 it’s own tax return. You will also pay the self employment tax. This is for asset protection. 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 have to file with them quarterly. Now, in CA, there are new laws in place about electric products – meaning not tangible goods. CA collects sales tax based on how many tangible goods you make.
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 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.
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 you 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.
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 actually don’t have a set paycheck from my business. I am an employee of my corporation. Instead, what I do is only take personal draws when I need it from the business.
I use Quickbooks for all my bookkeeping. At the end of each quarter, I send my QB file to my accountants so that they figure out my quarterly filings due each quarter.
Many folks use Quickbooks online. I found some limitations to it, plus I didn’t like paying every month for it. The more my Food Photography Club business grows though, I’ll probably have to switch over to QB online.
Please Get Business Liability Insurance!
Business liability insurance is a must. This is going to be its own post right after this one because there’s actually a lot to it.
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.
But for now, if you don’t have this insurance yet, here is where I get mine – Tom C. Pickard Insurance. They are not endorsing me or sponsoring me at all. I’ve been using them for at least 15 years now.
In my next post, we will 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 – moral of the story is to hire professionals to help you set up your business properly and legally.
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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