This is a post I did a few years back on my old blog and after gettting another email referencing the appreciation for this knowledge, I figured it might be good to bring this particular post to the new blog. So except for a few changes this is pretty much copied from the one I did years ago. A few things to remember while reading… this information is for the state of NC (it does vary by state) and at any time this may change. So even though this gives good information, make sure you are taking the time to check into what your county and state says.
So many people (mom’s in particular) pick up a digital camera, take a few photos, and overnight become a photographer. I’m not knocking it because I had a similar journey! But what this post will address is the business part of photography. Many people reading this will say…. well I don’t really make money at it, so I don’t consider it a business. I may challenge that with….. “Do you have a business name, do you have a website or Facebook fan page, do your charge for your pictures, do you have a logo or do you advertise your services?” If the answer to any of those is yes, then I would say you probably are running a business, you are just trying to avoid the business part of it. A lot of people combat that with…”But I don’t make any money, I’m just learning!” And even though that may be true, most businesses don’t make a profit during their first few years. Matter of fact, a typical business takes 5 years before it shows a profit. But not making a profit does not eliminate you from the responsibilities you have with a business.
For me one of the hardest parts of being a photographer is the actual business part. The book keeping, the payroll, the taxes, any one of those words can easily send me into a panic attack!!! But in all honesty I think just me knowing my weaknesses gives me an advantage in my business. I know that sounds crazy but for me, I know I stink in those areas so I find qualified people that can help! To start with, my mom does all my book keeping. Not only is she 100% trustworthy but that is what her career was for years. If there is a penny missing, she will crunch those numbers until it is balanced. And then I have an amazing CPA, Alex Pappas with H. Edwin Gray, that handles all my payroll, taxes, and any crazy questions I can muster. And by handle, he literally send me the forms I need to send each quarter with a little sticky that says…sign here with an addressed envelope and a sheet listing how much goes in each envelope. On occasion I get people that ask how much my CPA cost me and my answer is always the same….”It’s not cheap but it’s worth it!” When it comes down to it, I know my business is being run the right way. Every business owner has to decide what they spend their money on and for me it’s a no brainer!! I’m going to pay to have an expert help me with the business part because simply, I’m clueless!
So, if you are one of those people trying to slide by and not pay taxes because, “it’s just a hobby”. Then let it be a hobby and do what you love to do without the money involved. But if you want to be a photographer and earn money, step up and do it right. Because if you don’t and you get caught, it won’t be good!! Just recently I called the NC Department of Revenue to settle some questions I had concerning sales tax. You see in our lovely state, photographers have to pay sales tax on everything not just their products!! That’s right…session fees, labor, anything we charge for is subject to the 7% sales tax. This is something a lot of photographers don’t even realize. Most photographers think sales tax is only applicable to their products, such as prints, albums, etc. But in the state of North Carolina that couldn’t be further from the truth.. The auditor I spoke to personally showed me on the site where the bulletins where outlining it and proceeded to tell me, tons and tons of photographers have been audited on their sales tax over the past couple of years and have been caught not paying it correctly. So to any NC photographer that is not paying 7% sales tax on all their sales, please start!!! The auditor even told me that most of the ones caught weren’t doing it because they just didn’t know. But not knowing doesn’t eliminate your responsibility when you run a business. If you are like me and you don’t know the business part, get a book keeper and a great CPA (if you need one I happen to know one). You may think it’s a lot but I promise the penalties and fees for doing it wrong is worse!!
So there it is, my latest rants and raves. This may not be a popular post and I’m fine with that but I’ll leave you with a image to remind you of how you may feel if you get caught doing it wrong……