Starting a new business - LLC?

[DreamPhotos]

How do most of you have your business set up? LLC? I'm probably just going to use Legal Zoom, as I've used them in the past for my non-profit foundation set up.

Also, should I hold off on purchasing equipment until the business is officially set up and legal, so I can deduct the expenses?

Thanks in advance!

 

[DanielLewis76]

Good Luck (in the UK so can't advise on the best way to set up a company in the US).

What is your company doing?

 

[robbins.photo]

How do most of you have your business set up? LLC? I'm probably just going to use Legal Zoom, as I've used them in the past for my non-profit foundation set up.

Also, should I hold off on purchasing equipment until the business is officially set up and legal, so I can deduct the expenses?

Thanks in advance!

LLC is always a good way to seperate your personal assests from the business, which means you'll most likely get hurt a lot less should something go horribly awry. However, keep in mind I am not a lawyer, I don't play one on TV, and I'm no longer welcome to stay at any holiday inn express on the planet. So I'd recommend you get some good, sound, paid legal advice on this one just to be sure you have all the I's dotted and the T's crossed.

 

[ronlane]

Notice: I am not a lawyer and don't want to be one and I'm not a tax accountant.

That being said, I would applaud you on using a lawyer to set things up. Now, you mention not buying equipment until you set up the LLC. What equipment are you referring to? Why would you not have equipment and have been shooting for some time before concerning yourself about a business? What is your photography background? Have you spent time practicing your skills and learning the craft of photography?

Please know that I am not judging here because I do not know the answer to these questions, but these questions need to be addressed prior to spending the money on a lawyer to set up an LLC.

Good luck.

 

[Tiller]

I would not go with an LLC. It's technically it's own entity so it's subject to taxation on its own on top of your taxes as an individual.

I would just go with a sole proprietorship. There's a reason it's the #1 most popular business type in America.

 

[Tiller]

And I would never ever ever use legalzoom. Ever.

Get a real lawyer.

 

[KmH]

As a new business, be careful deducting equipment as a business expense.

The IRS requires a business to make a profit in 3 of the last 5 years including the current year.

Business or Hobby? Answer Has Implications for Deductions

LLC specifics, cost to establish and maintain, reporting requirements, and accounting requirements vary by state.
A single member LLC may not protect a persons asset's any better than a SP will (sole proprietorship).

 

[rolbai]

I would not go with an LLC. It's technically it's own entity so it's subject to taxation on its own on top of your taxes as an individual. I would just go with a sole proprietorship. There's a reason it's the #1 most popular business type in America.

A single member LLC is invisible for federal tax purposes and most states. It may provide some protection from some liabilities but not professional liability. That means if you fail to deliver your professional services then the LLC (or SCorp or CCorp) will not protect you.

In SC, after the cost of creating the LLC, there is no additional costs as opposed to a sole proprietorship. Other states may have an annual fee they charge. Check with a local CPA.

I recommend a LLC for all my self employed clients.

Sent from my iPhone using PhotoForum

 

[imagemaker46]

I was also wondering about the gear question, if you are waiting to buy gear as a deduction, how is it that you are wanting to set up a business that requires you to know how to use the gear in the first place? Do you already have cameras? and are you skilled enough to open a professional photographic business?

 

[DreamPhotos]

I have a camera, limited lenses, lighting, backdrops, speedlight, editing software. I'm looking into a few new lenses, props, a new equipment bag to hold more. Nothing major, but I was just thinking it might be more of an advantage to buy it through the business, if I set one up.

 

[DreamPhotos]

I have to say that I'm a bit curious, because I sort of expect other photographers to chime in with how their business is set up, but now I'm wondering how many people are operating under the table, as opposed to through an actual business.

 

[imagemaker46]

Under the table, not declaring the extra income, I would guess the majority of facebook photographers, weekend amateurs, kijji photographers, craigslist photographers.

What kind of "real" experience in photography have you acquired that you feel it would help you in becoming a successful full time professional photographer?

 

[wyogirl]

Laws vary somewhat by state. My business license is as sole proprietor, I'm registered with the state with "doing business as" with my name and my web name. Essentially I have no additional paperwork to do, I just have to report my income (however, I haven't turned profit so I am still in hobby range) and collect sales tax. I pay 2 fees, one to the state and one to the city.

I only have a business license because I do occasional work for the schools. I really have only brought in about $200 this year and have spent way more.

 

[imagemaker46]

I'm also sole proprietor, collect and pay tax on everything I earn.

 

[KmH]

I have a camera, limited lenses, lighting, backdrops, speedlight, editing software. I'm looking into a few new lenses, props, a new equipment bag to hold more. Nothing major, but I was just thinking it might be more of an advantage to buy it through the business, if I set one up.

Are you familiar with Florida's Use Tax:

FL Dept Rev - Florida Sales and Use Tax

Use tax is due on the use or consumption of taxable goods or services when sales tax was not paid at the time of purchase. For example:

• If you buy a taxable item in Florida and didn't pay sales tax, you owe use tax.
• If you buy an item tax-exempt intending to resell it and then use the item in your business or for personal use, you owe use tax.
• If you buy a taxable item outside Florida and bring or have it delivered into this state and you didn't pay sales tax on the item, you owe use tax.

Florida expects you to pay Use Tax on anything you have bought or buy online that did/does not include paying sales tax.