Sell prints as individual or business

[Melany]

I just filed my quarterly tax form online (easy, since it was 0)
I found the link I need if I decide to go out of business (or close my business)

Now I need to decide if I need to keep the thing, or quit. Any reason I should keep it? I might decide to show at an art show again. That's the only + I can think of.
Quarterly reports could be a pain, but as long as I keep getting the letters in the mail, it'll be easy.

[fishcat]

Originally Posted by Flores

I've been confused by this new rule. do they still charge you the $50, if you are reporting zero sales? I didnt collect a whole lot in the first half of the year, but have been busy starting a new job the last half of the year so. havnt sold anything.

when i logged into the state site, they hit with the penalty for last quarter... :(

Per the website "a $50 penalty when a report is filed late". Looks like it doesn't matter if you haven't sold anything. I did notice on the web filing page that you can file by telephone if you had no sales.

[kayumangi]

Originally Posted by Flores

I've been confused by this new rule. do they still charge you the $50, if you are reporting zero sales? I didnt collect a whole lot in the first half of the year, but have been busy starting a new job the last half of the year so. havnt sold anything.

when i logged into the state site, they hit with the penalty for last quarter... :(

Only when you fail to file on time.

Check this out

FAQ: Texas Sales Tax

[Flores]

i'm just trying to remember if I opted in to keep doing quarterly or defaulted to going yearly...

I guess the former :D

[fishcat]

Originally Posted by Melany

I just filed my quarterly tax form online (easy, since it was 0)
I found the link I need if I decide to go out of business (or close my business)

Now I need to decide if I need to keep the thing, or quit. Any reason I should keep it? I might decide to show at an art show again. That's the only + I can think of.
Quarterly reports could be a pain, but as long as I keep getting the letters in the mail, it'll be easy.

Ahhh....but once you file online, you will no longer get that letter in the mail. The State expects that you will continue to file online. And you only need to do quarterly based on total taxes collected. Under $1,000/year can be annually.

[XtremePhoto]

Originally Posted by Flores

i'm just trying to remember if I opted in to keep doing quarterly or defaulted to going yearly...

I guess the former :D

You don't opt in when remitting your sales tax...the State Comptroller TELLS you when you file, be it yearly, quarterly or monthly. We have no choice when we file our sales tax report and payment. It is Monthly no matter what we would like it to be. It is all based on the amount of money you owe the state in any specific period. There are specific thresholds that once you file and you meet a threshold, the State will increase the frequency of when you file and remit your payment. They don't give you a choice to 'pay when you want to.'

-G-

[XtremePhoto]

Originally Posted by Tom

The IRS lets you run your business at a deficit for 2 of 5 years. Then you must show profit or they will say you are a hobbyist and you lose all tax breaks and they probably make you pay back all the taxes you deducted.

Not entirely correct. They have no SPECIFIC period that they use to determine if you are in business (even at a deficit) before they declare it is hobby. The key is "operating with the intent to make a profit." You do NOT have to make a profit however, but be ready to supply them the basis for operating a business with the intent to make a profit. In all actuality you can lose money each year and they cannot declare it a hobby. I have friends that have declared losses every year for well over 15 years and the IRS has not declared their business a hobby. Great documentation and records that meet the standards of the IRS prevent them from doing anything. I dare you to find any law, regulation or rule that says you must "make a profit" in the Federal Tax code. It isn't there.

Granted, your point is most often correct. But the problem comes in that most people trying their hand in Photography (or any other business for that matter) have little to NO 'business sense' and they do not keep proper or adequate records that show the business intent of what they are doing. That is why when they are audited they end up in trouble because they cannot support anything they claim.

For many it a surprising that there is a "standard" of record keeping that you are held accountable to when you enter into business. Let the State Comptroller Audit you and your records aren't up to snuff...they will simply fine the crap outta you and tell you "this is your income you owe sales tax on" simply because you cannot prove to them otherwise. Poor Records.

So many believe it is a simple thing to "hang out your shingle" and operate your own business. It is just NOT that simple. You have numerous laws, regulations and rules that can cost you, if you fail to do your homework. Fact of the matter is, their is just as many rules, regulations and laws for small business as there is for larger corporations. It is just more difficult to track it all for larger corporations!

-G-

[Flores]

Originally Posted by XtremePhoto

You don't opt in when remitting your sales tax...the State Comptroller TELLS you when you file, be it yearly, quarterly or monthly. We have no choice when we file our sales tax report and payment. It is Monthly no matter what we would like it to be. It is all based on the amount of money you owe the state in any specific period. There are specific thresholds that once you file and you meet a threshold, the State will increase the frequency of when you file and remit your payment. They don't give you a choice to 'pay when you want to.'

-G-

I got a letter this time last year, telling me I had a choice... (shrug)

[XtremePhoto]

Originally Posted by Flores

I got a letter this time last year, telling me I had a choice... (shrug)

Wow, I won't argue with you on that, since you got the letter. I do know that if you pass a threshold, of so much per reporting period, you don't have a choice. (Ask Wal-Mart.) The more you report (sales you make) the MORE OFTEN you pay! The last time we received a notice on this, it was TELLING us we would report monthly and pay monthly. No option.

-G-

[Flores]

Thats sounds about right. my business was trending that direction, sales tax amount wise, last year, and I seem to recall the letter was to let me know I could continue to file quarterly OR go to yearly, my choice.

Clearly, I picked quarterly :)

[Buddha]

Yes, you can close out your tax ID account with the State. I've done it and it isn't hard. Give the Comptroller a call.
My understanding of filing Texas Sales Taxes is that it must be done quarterly or you will be penalized $50 per quarter.
Some comments Re: federal taxes. You should probably file as Self Employed for your photography business expenses and income, even if you have another job. You will need a Schedule C and a Schedule SE to do this. You won't pay federal tax unless you make over $400, but you have to file to show that.

[XtremePhoto]

Originally Posted by Buddha

Yes, you can close out your tax ID account with the State. I've done it and it isn't hard. Give the Comptroller a call.
My understanding of filing Texas Sales Taxes is that it must be done quarterly or you will be penalized $50 per quarter.
Some comments Re: federal taxes. You should probably file as Self Employed for your photography business expenses and income, even if you have another job. You will need a Schedule C and a Schedule SE to do this. You won't pay federal tax unless you make over $400, but you have to file to show that.

My suggestion and only that, a suggestion is don't give advice on something you are not totally familiar with and well aware of.

If you read Texas State Sales Tax Code, you will be aware that there are SEVERAL ways to pay: Direct Permit, Monthly, Quarterly and Annually. If you miss a payment/reporting date on ANY of these you will pay the $50.00 late fee - and there is no longer a grace or forgivness on this fee. You are late, you pay. Period.

Your information here is so vauge it I can't even start to comment on the possibilitlies that could screw you.

Your best bet when dealing with business, state sales tax, IRS and Federal Tax etc. is talk to a very experienced person: Business Consultant / CPA etc. Having started from a Sole proprietorship that is now a multi-level corporation, it is just not as simple as you make it.

Yes, you can close your account with a simple phone call, provided you are current and owe NO taxes to the State. But to tell someone that is seeking information that State Sales Tax MUST be filed quarterly is completely wrong...it depends on your business and the volumn of sales you do in any given reporting period. No information is better than WRONG information.

-G-

[Buddha]

The Comptroller's Office told me to file quarterly as a sole proprietor, as Melany is. She has no earnings or sales and she and you both mentioned, and no reason to file yet, so closing her account should be easy as you said in that case.
As for federal tax, I worked for the IRS dealing with individual taxes and the self employed on a daily basis. I'm familiar with what Melany might need and what problems she might encounter based on that experience. She also has a year to look into it, and I gave her a direction to go in for starters.
Had she called and talked to me while I was at the IRS, I would have told her the same things were required, and so would everyone else at the IRS.
Her issues sound very different from yours, with different solutions.
Congratulations on your business successes.