Starting out: What to charge? How to market?

[spacefuzz]

You make it sound like what you're talking about is difficult. Liability insurance is cheap cheap, an LLC is formed in 10 minutes online for $130 in my state. You shouldn't worry about paying taxes until your third year if you do things right. If you're really business savy taxes should almost be non-existent.

Lucky your llc is only $130. In CA they charge $5000. I was floored

 

[bennielou]

You make it sound like what you're talking about is difficult. Liability insurance is cheap cheap, an LLC is formed in 10 minutes online for $130 in my state. You shouldn't worry about paying taxes until your third year if you do things right. If you're really business savy taxes should almost be non-existent.

Lucky your llc is only $130. In CA they charge $5000. I was floored

Wow, Spacefuzz that seems super crazy high. I did my dba at the county. I think I paid something like $45 bucks.

More on LLC taxes:
he election to be taxed as the new entity will be in effect on the date the LLC
enters on line 8 of Form 8832. However, if the LLC does not enter a date, the
election will be in effect as of the form’s filing date. The election cannot
take place more than 75 days prior to the date that the LLC files Form 8832 and
the LLC cannot make the election effective for a date that is more than 12
months after it files Form 8832. However, if the election is the “initial
classification election,” and not a request to change the entity classification,
there is relief available for a late election (more than 75 days before the
filing of the Form 8832).


The amount of loss you can deduct may be limited because of your limited
liability for LLC debts.

Passive Activity Loss limitation may restrict the amount of loss you can
deduct.

And this from the LLC made easy site:
The wholesaler's "proof" of this is to keep a copy of your "Sales Tax ID number" on file, so that they are not liable for the tax on the products shipped to your customers. Your "Sales Tax ID number" proves that YOU are collecting sales tax on your customers' purchases. In general, you only collect sales tax on the products shipped to addresses in the state where your business resides, but you should check to be sure how this is done in your own state.
Every state has a web site listing information about the tax rules in that state, and where you can obtain your "Sales Tax ID number". Click on your home state below to go to that site, and get the information you need

 

[shootermcgavin]

Oh, you only have to pay your sales tax in the third year? I guess Texas doesn't know about that yet........I'll have to let them know.And yes, it's NOT difficult to set things up legally. But many photogs don't. For instance, if I looked you up, would I find a legal business or a shadow?

Ah sorry, I wasn't thinking you meant sales taxes. There are definetely ways around sales taxes as most of the photography business is a service. I am unique in that I have many LLC's because some of my businesses deal with extreme liability exposure, so you would find a shadow corporation. I meant more the common rule of thumb is that a business loses money their first 2 years and should think about showing profits their third. But I don't consider photography a business personally more of a business write off. I believe in any hobby becoming a business if only just for the tax write offs.

Nice. Yet another photog who sees all this "legal stuff and taxes" as unnessary. And BTW, with all your LLCs, I would assume that you would know that you can't have a business "write off" until it's actually a real tax paying, money losing, legal set up business.Brilliant business people here..... Carry on.

That's about the most innacurate business statement I've heard. I just started ABC Business Company.... and that's a legal company now, it's that easy! You can write off taxes at anytime on a business you tell the government about and you only have to tell them when you file your taxes. You can not pay a dime in taxes and still write off money on a business, not sure where you're getting your information. Any good accountant will tell you with a new business it's best to show losses the first 2 years. I think you're over complicating setting up a business, you can go to your bank and create 1000 DBAs tomorrow and although they might not like you anymore they certainly aren't going to tell you it's not legal.

 

[spacefuzz]

Hmm my accountant told me that if I showed massive losses my first two years it was just asking to get audited by the IRS.

And yes $5000 for an LLC in California. PER YEAR. Its crazy. I paid $120 in Ohio and was quite shocked when I tried to transfer it over. As a result I switched to a sole proprietorship.

 

[Bitter Jeweler]

My accountant told me to not worry about taxes the first 3 years, that I'll probably be getting money back. That's bull****. Surprise! I had to pull nearly a third of my income outta my ass to pay my taxes, because of that rather common school of thought.

 

[shootermcgavin]

1/3 Bitter? I think it's time to get a new accountant. I've never paid more than 10% in my life even when I made over 6 figures and worked for someone. 33% is an extremely high income tax. If you're making a ton of money your first 2 years then yeah of course you will have to show some as profits, but unless you're making 200k or more a year what is the major worry of going too high than too low? They say naughty naughty you have to pay a couple thousand more? I'd rather have that happen then leave a couple thousand extra on the table.

 

[bentcountershaft]

What state are you in, Shooter?

 

[shootermcgavin]

WI, but lived in FL a lot, nice not having state income tax.

 

[2WheelPhoto]

You make it sound like what you're talking about is difficult. Liability insurance is cheap cheap, an LLC is formed in 10 minutes online for $130 in my state. You shouldn't worry about paying taxes until your third year if you do things right. If you're really business savy taxes should almost be non-existent.

Lucky your llc is only $130. In CA they charge $5000. I was floored

Liberal taxaholic state.

 

[bentcountershaft]

Shooter: I lived in Florida for a short while. No state tax was nice but milk was $5 per gallon and that was almost twenty years ago.

Spacefuzz: That seems like an extortionate amount. The fees listed on your Sec. of State's site are only $70.

 

[shootermcgavin]

Shooter: I lived in Florida for a short while. No state tax was nice but milk was $5 per gallon and that was almost twenty years ago.Spacefuzz: That seems like an extortionate amount. The fees listed on your Sec. of State's site are only $70.

Well the lawyer has to make something, come on have a heart!

 

[Bitter Jeweler]

1/3 Bitter? I think it's time to get a new accountant. I've never paid more than 10% in my life even when I made over 6 figures and worked for someone. 33% is an extremely high income tax. If you're making a ton of money your first 2 years then yeah of course you will have to show some as profits, but unless you're making 200k or more a year what is the major worry of going too high than too low? They say naughty naughty you have to pay a couple thousand more? I'd rather have that happen then leave a couple thousand extra on the table.

I won't get into details, but yes, I will be getting a new accountant, and yes, I was quite successful in my first year, and figures continue to rise.

But that advice is still the worst to give, ever.
You should always save for, and be prepared to pay. Always.

It becomes a burden when you now owe past tax liability, AND have to save for next years tax liability.

So please, don't ever pass on that advice!

 

[2WheelPhoto]

Shooter: I lived in Florida for a short while. No state tax was nice but milk was $5 per gallon and that was almost twenty years ago.

Spacefuzz: That seems like an extortionate amount. The fees listed on your Sec. of State's site are only $70.

Milk isn't $5 a gallon now!? I can buy a gallon of real brand name coffee creamer for less than that in FL.

 

[bentcountershaft]

Maybe it just seemed like $5 at the time. It was double what I paid up here at the time, that much I'm sure of. Actually, it was probably cigarettes that were $5 back then when they were $2 here.

 

[KmH]

It's likely just a matter of time before the tax guys catch up with one of the posters in this thread.

When they do, it's going to hurt the bank account really bad, and lifer Bubba is going to have a new wife.