I just posted this same message on CANP. I have been thinking for a while about setting up a website for selling my prints. I am sure many of you here at PNWNP have websites selling your prints, and I have a few questions I am hoping you could answer for me:
1. Does a website selling your work count as a business? Do you get to deduct your photography-related expenses from your taxable income?
2. Do you have to register the website as a private business enterprise with your home state and/or other local bureaus? Does one require a "license to sell"?
3. Do you have to charge sales tax when selling to CA residents?
4. Does selling your work through "3rd party" websites like smugmug.com pro count as a business?
Any answers to the above would be much appreciated, thanks.
Kartik
Posted by Adrian Klein on January 29, 2008 at 8:17 PM
Kartik, I am not a business advisor so I would suggest final decisions be based on professional knowledge and consultation if you have concerns. However, here is what I have to say on the above.
1) Yes and Yes (look into licensing your business with the state your business is in to be official)
2) No
3) Don't know.
4) Anytime you start to offer your work for sale you are considered a business for the most part. Even if you don't have a actual business name/license. It's considered that way as far as insurance cov for your equipment (get biz coverage). And for taxes I think it's something really small like $600 or less a year that you can make as a hobby without claiming the income but again consult an account to make sure.
If you want to go through a private web company, check out pinnacleinnovations.org. They created my website at a relatively cheap price. They also use a huge server, so the photos you upload can be high res jpgs.
1. Selling your work is a business, website or not. You deduct expenses on Schedule C of your tax return and report profit or loss on 1040.
2. You have to register your business with the state, get a business license number, and then you can purchase pruduction supplies/materials/printing exempt from sales tax, but equipment is not exempt.
3. Yes, you must charge sales tax to all your home state customers, and file state business tax returns.
4. You must report sales proceeds from smugmug, etc. as business (on Sched C) or other (1040) income.
Go to your State Dept of Revenue web site to get details.
Discussion
3 repliesI just posted this same message on CANP. I have been thinking for a while about setting up a website for selling my prints. I am sure many of you here at PNWNP have websites selling your prints, and I have a few questions I am hoping you could answer for me:
1. Does a website selling your work count as a business? Do you get to deduct your photography-related expenses from your taxable income?
2. Do you have to register the website as a private business enterprise with your home state and/or other local bureaus? Does one require a "license to sell"?
3. Do you have to charge sales tax when selling to CA residents?
4. Does selling your work through "3rd party" websites like smugmug.com pro count as a business?
Any answers to the above would be much appreciated, thanks.
Kartik
1) Yes and Yes (look into licensing your business with the state your business is in to be official)
2) No
3) Don't know.
4) Anytime you start to offer your work for sale you are considered a business for the most part. Even if you don't have a actual business name/license. It's considered that way as far as insurance cov for your equipment (get biz coverage). And for taxes I think it's something really small like $600 or less a year that you can make as a hobby without claiming the income but again consult an account to make sure.
2. You have to register your business with the state, get a business license number, and then you can purchase pruduction supplies/materials/printing exempt from sales tax, but equipment is not exempt.
3. Yes, you must charge sales tax to all your home state customers, and file state business tax returns.
4. You must report sales proceeds from smugmug, etc. as business (on Sched C) or other (1040) income.
Go to your State Dept of Revenue web site to get details.