Business Licenses?

[mrsrice22]

I'd like to make the move into becoming "official" next year but I'm not sure how this works.

For creative services, such as photography, is a DBA the best route? I've asked a few people that own their own business, but they have their legal name in their business name (eg Joe Smith Graphics, Jane Doe Design) and just use their social security number and forms for taxes and such. But if you're operating under a different name for your business, then how does that work?

I've also seen some with LLC, but when I read up on it I'm not sure that it's applicable to this type of work.

Any info would be apprecitated, I've googled and read the same material 10 different ways and it's still clear as mud to me.

Thank you
Kristina

[Tom]

As soon as you take your first dime for photography, you need to have a sales tax license and you are required to collect sales tax. Failure to do so can create huge fines for you and cause a lot more than a headache.

[suerenee]

Go to your County Court House and get a DBA. Then file with the Secretary of State to collect sales tax. You will receive a Tax ID #.

You can form an LLC but the filing fees alone are almost $300 and to pay an attorney to do it will cost upwards to $1K. LLC's create massive tax headaches b/c of the different forms you have to file.

I'm not an expert but the DBA and filing a Schedule C as a sole proprietor is the easiest route IMHO.

Thomas is right though--collect your taxes..I know of several photographers who are still paying backed sales tax. Very messy.

[Flea77]

One correction for what Susan said, it is the State Comptroller who you file with for sales tax.

All the rest is spot on, collect your taxes, have a separate bank account just for your business, keep income and expenses completely separate from your normal stuff.

Allan

[mrsrice22]

Thanks Susan, that's what I'd like to avoid if possible (the huge upstart fees).

I did search on Texas' website on how to start a business and they have the option of filing online but they don't say how long it takes for approval, does anyone know how long the process/turn around is?

[suerenee]

Originally Posted by Flea77

One correction for what Susan said, it is the State Comptroller who you file with for sales tax.

All the rest is spot on, collect your taxes, have a separate bank account just for your business, keep income and expenses completely separate from your normal stuff.

Allan

oops...my bad...need more coffee! :) Thanks for correcting me Allan!

[suerenee]

Originally Posted by mrsrice22

Thanks Susan, that's what I'd like to avoid if possible (the huge upstart fees).

I did search on Texas' website on how to start a business and they have the option of filing online but they don't say how long it takes for approval, does anyone know how long the process/turn around is?

I got my DBA same day. My husband and I got my DBA and our marriage license in less than an hour at the court house.

Also a heads up---The county will sell your name, address and phone number to a variety of folks who will want to sell you stuff. Ask if you can leave off your phone number to avoid the sales calls. 6 months later and I'm still getting tons of junk mail for my business.

[Steelsun]

For a simple one person company with little chances of lawsuits coming your way - go DBA.

Go to your county clerk's office and do the "Assumed Name" or DBA filing. In Harris County it's $16 ($15 plus a $1 notary fee), not sure about Galveston County.

I went to a Harris County Annex last week and got mine filed and done in about 30 minutes (but 20 of that was waiting in line - seemed like alot of people were getting marriage licenses). Other times I have been in and out in 5 minutes (I have alot of DBAs).
(I actually hit the post office first and got a PO Box to use as my business address on the DBA. And in Harris County they don't ask for your phone for the filing).

You can do your Sales Tax stuff online now. And if you want an EIN instead of using your SSN, that's online also.

Check out credit unions when it comes time to open a business checking account. The one I use for 2 businesses now has free business checking with no minimum balance as long as you do less than 175 transactions a month (then it's only 25 cents per transaction over that). They also gave me free checks and an endorsement stamp.

[rab3rd]

So if you are doing business under your name, i.e John Doe, then its not fictitious but if you add "Photography" to the end then it would be? Am I understanding that correctly?

[Steelsun]

Correct, that is how it is supposed to be.

Some places will let you slide without doing that if your legal name is in it, but it's a good idea to pay the small fee to make sure you are legal anyway.

[rab3rd]

So at what point should one do this? I have sold a few photos via smugmug and done a few portrait shoots for friends at a minimal charge (only because they insisted). Should I be doing this under a DBA? Is there a minimum amount of money generated that needs to be overcome before it is a requirement?

[rab3rd]

I see that Thomas says "first dime" So am I too late already?

[mrsrice22]

lol, yes. Someone will be knocking on your door in t-minus.....

Honestly the sooner the better. I know there are tons of people out there that aren't licensed and have been doing this on the side for years but quite frankly if this is something that you enjoy and want to be taken seriously by colleagues and clients, then get legal.

Thanks everyone for all the info, I swear after days of searching the internet and asking a few other photogs this is probably the best and most informative responses I've gotten.

Since it's that fast, I'll probably skip waiting til the first of the year and get it done this week! :)

Kristina

[Flea77]

Originally Posted by mrsrice22

lol, yes. Someone will be knocking on your door in t-minus.....

Honestly the sooner the better. I know there are tons of people out there that aren't licensed and have been doing this on the side for years but quite frankly if this is something that you enjoy and want to be taken seriously by colleagues and clients, then get legal.

This is spot on with one addition. If the state hears that you collected income from a supposed business (to clarify, from what THEY call a business, not what you call one) then they can and will hit you with the tax amount, penalties, late charges, interest, etc etc. Since it is tax, they can do anything they want including freezing any and all checking, savings, funds, etc and garnishing any other paychecks you may have for life until it is paid off and there is not much you can do.

The risks FAR outweigh the rewards.

Allan

[rab3rd]

Now you are all just scaring me...