If you made your way to this post that means that you are interested in starting your own photography business and that is SO exciting! The rush of wanting something of your own is so worth it - if properly executed. The designing of your logo, color palette, business cards, website design, etc.. is the fun part of this process, but you can't forget to take care of the legal things too. This post will help you find your way through the legal hassles of starting your business, and hopefully put you on the right path to being a successful photographer. Let's get into it :)
Step One - Choosing a Business Name
This is a big step because it ultimately brands your business in the simplest form. When I first started, I was going by "Evermoore Photography", because at the time my last name was "Moore" and I thought it was cute. However, I never checked the business name to see if it was still available, and I was getting married, so I guess was it should have been "nevermoore" photography (;
Most photographers choose their own names. If you choose anything other than your own name, you have to take a couple of extra steps. As an example, let's say I select something like “Framed Moments Photography”
I need to make sure that someone else does not have trademark rights over that name. I can find out in two ways. The first step is to check USPTO.gov and perform a TESS trademark search. It works like a normal search engine. Just choose “basic word mark search” and then type in the proposed name of your business and hit “search.” When I do that, I see that the lame name I've chosen brings back no results. That's a good thing!
If there are no matches in TESS, then we need to use Google. Do the same thing, searching for other businesses with the same name. If there are, it's really best to just avoid it. Just because they haven't REGISTERED their trademark doesn't mean they don't HAVE a trademark. Trademarks are earned through use–not registration. Registration simply adds another layer of protection.
Step Two - Business Type
This is a struggle for most photographers to decide between registering as an LLC or a Sole Proprietorship. There are other options out there, but in the photography world - these two are the main types. Personally, I registered as a Sole Proprietorship because I only do photography part-time, and the difference is for your protection of assets. The truth is that most photographers don't need to go through the work of creating an LLC. An LLC is the most popular form of a separate entity that separates personal and business responsibilities and assets. A sole proprietorship simply means a person who does business. If you don't register an LLC, you're automatically a sole proprietorship.
Step Three - Get an EIN
This is your Employer Identification Number, and it's mostly used with the IRS for tax purposes. If you want to set up a business bank account or payment processing system, they will most likely ask for your EIN. It takes about 5 minutes. Just go here and fill out the simple form and you'll get your EIN. It's free. Save it somewhere you can find it. You'll need it pretty regularly.
Step Four - Separate Your Finances
This is such an important step that is often overlooked. Once you start earning an income from your photography business, you need to separate your personal finances from your business finances. Go to your bank and set up a business checking account.
Absolutely every single penny your business earns needs to be put in the business account. Every single penny you spend on business items needs to come from that same bank account. Never, ever, ever use your business account to buy a personal item. Ever.
Step Five - State Sales Tax
As a registered photographer earning an income, you will need to register for your States Sales Tax. This is the most skipped step by photographers. I live in Iowa, so I have to charge sales tax on everything with my business (sessions, digital galleries, etc).
To pay State Sales Tax, you first have to register with your state. Google your state sales tax commission and there will be directions on how to get a Sales Tax ID and how the process works in your state.
Some states don't have any sales tax, but most states charge about 6%. So you'll need to update your pricing page with a little asterisk and a note that says “All sales subject to state sales tax.” Then when you get payment from the client, add 6% to the price. You should also take into consideration your county's tax, and add that to your client's invoice. For example, in Iowa, the state tax is 6% and the county that I do business in is 1%, so I add 7% to my client's invoice.
Step Six - TAXES
This is probably the most important step when starting your photography business. After you get your EIN #, you can register to get your business license through your state! This is SO important because a business license will allow you to get business liability insurance & it will also help you get bookings!
You’ll want to keep track of your expenses, assets, & profits.
For expenses, write down anything that you buy for your business. Only save the receipts that you can use for deductions (basically anything that has a product shelf life, for example, new camera gear, anything electronic usually). Your long-term assets are what I usually keep track of & that’s anything that has a product shelf life, as to how I explained in the sentence prior. Then you have to keep track of the profits that you make throughout the year so that your accountant can come up with your gross income for the year. Once your accountant comes up with your gross income, they will deduct whatever deductions you have for your business (in other words, whatever can be written off like a long-Term asset) & then that number will be what you are taxed for the year.
Every state has 2 sets of taxes that small business owners need to fill out. Both taxes need to be filed for every small business owner regardless of what their entity is (LLC or Sole proprietorship).
The first set is quarterly: Quarterly taxes are different in each state on when they start / end, that information should be on your state’s Department of Revenue page. For example, for IA state’s website is named “Iowa Department of Revenue.”
The other taxes that you’ll have to file are your yearly taxes that happen at the end of the year. This will be done whenever you file your personal taxes.
As for the forms, there’s nothing that you need to fill out on your own except for the quarterly online & it should help walk you through the steps!!
This was a lot of information thrown at you, but it is so worth it! You are on your way to making something of your own and I am SO proud of you. Once you get past all of the legalities, you will be having so much fun. If you have any questions about anything photography-related, let me know!! I am here to help :)