Legal or Illegal?

dennybeall · Feb 3, 2015

Conversation to answer the question should start with "You pay taxes on profit, not gross. " Small occasional jobs rarely result in a profit. Take the money. Write all the in and out in a journal and worry about it in March of next year. Even when you try to make a profit it ain't easy!
Some jurisdictions don't have sales tax on certain services.

curly · Feb 3, 2015

If someone were to buy equipment to start up a venture and applied for a DBA license after buying said equipment, but it was in the same tax year, would that be deductible on that year's return?

dennybeall · Feb 3, 2015

Licenses and taxes have nothing to do with one another. There is no relation except the costs of any licenses are tax deductible.
Well, not exactly true. The governments check licenses to see who may need to file tax returns

curly · Feb 3, 2015

dennybeall said:
Licenses and taxes have nothing to do with one another. There is no relation except the costs of any licenses are tax deductible.
Well, not exactly true. The governments check licenses to see who may need to file tax returns

I was meaning could the equipment (not license) be deducted on taxes as a business expense if the license was filed for after equipment was purchased but within the same tax year.

480sparky · Feb 3, 2015

You deduct your equipment and license costs the same tax year you purchase them. So if you purchase a license this year, or buy a piece of gear, you will deduct them from your 2015 taxes you file in 2016.

unpopular · Feb 3, 2015

Many local community colleges or public libraries offer what are called "small business incubators" which will offer clinics or even one-on-one mentoring for just this sort of thing.

But if you're getting clients and studio lighting makes intuitive sense to you, there's no reason to limit yourself like this! Take some business classes and open shop!

b_twill · Feb 9, 2015

I am not a tax expert and I don't play an expert in commercials.
That being said maybe you can just report your income as a hobby and not worry about it. I would still set up a bound ledger showing who, when and how much to document your occasional endeavors. Just in case anyone ever asks.
This may help the tax issue a bit. Business or Hobby Answer Has Implications for Deductions
Otherwise in lieu of cash, print out some business cards and ask that they pass them along.

KmH · Feb 9, 2015

Read that Business/Hobby IRS link above carefully.
It is a good idea to hire a qualified accountant or CPA to do your business taxes for you.

If you deduct equipment purchased this year, and then do not make a profit in 3 of 5 years (2015, 2016, 2017, 2018, 2019) expect to the IRS to retroactively declare your 'business' a hobby and disallow all the business deductions you have claimed in all those years.

Of course the IRS will expect immediate payment of the back taxes due and add any penalties they deem appropriate.

Thad Pannell · Feb 9, 2015

CourtneyCollins said:
I guess that is my question. I'm totally sorry if this has been posted somewhere, but I am unable to find the right answer....

I am 18 and photography is more of a hobby for me, but I have had SO many people ask for me to take their photographs and how much do I charge. I recently started getting into trying out studio lighting and that turned out to be a hit for me. I have had two sports teams request for me to take their pictures.... Now my question.. Is it illegal for me to take money from them? I usual do not even ask for money, but I have had so many people telling me it's silly for me to be doing this for free.

No, I do not have a business and no I will more than likely not be making more than $3,000 a year from this. I've always been scared to charge people for my pictures because I do not know if that is legal for me to do or not.....

One thought have some sort of a contract

dennybeall · Feb 9, 2015

There are significant tax advantages to having a small business. Since there are so many advantages there are a bunch of rules to keep folks from taking too much advantage.
It's well worth your time and research to look into this aspect of your photography. If you have other income it can be even more beneficial to you.
Think about a two week photography vacation to the mountains and it can be almost 100% tax deductible if you do it right.
If you really try to make a profit it's not a hobby. Not actually succeeding is not a tax problem.