Re: Income and selling prints / etc. at tax time

Some great points, but consider the facts. If you make less than $33,000 in
a year, you don't have to file a Self Employment form Schedule C, SE and the
government is not going to put any resources onto someone who doesn't file
for having made less than that.

Business insurance for photography through Heartford costs some $45 a month
and covers without question up to $20,000 with a $2,000,000 liability. It's
based on 'exposure' and if you don't photography every day and you're not
out of the house using your euqipment don't buy it. Otherwise, you're
skating on thin ice if you don't have it.

S.
----- Original Message -----
From: "Jeffrey D. Mathias" <jeffrey.d.mathias@att.net>
To: <alt-photo-process-l@usask.ca>
Sent: Monday, April 24, 2006 7:29 AM
Subject: Re: Income and selling prints / etc. at tax time

> Another thing to consider is that many insurance companies consider that
> if you make any money from photography, your photographic equipment is not
> covered as part of your homeowners policy, but a separate schedule or a
> business policy could be added for additional premium. This is independent
> of whether the photography is a business or not. If it is a business, you
> may only have liability coverage through a business policy (something else
> to consider.)
>
> As to taxes, remember the sales/use tax which may have different rules for
> each state. This is separate from income and does not involve the federal
> IRS but does involve the state (although one should file the income
> schedule C to separate the business stuff). And this might be any state in
> which you make a sale. Generally states do not collect what other states
> do so mail order typically goes to the state where shipped from. Although
> caution should be observed in that if one state has a higher sales tax
> than another, they may require the difference to be paid. These taxes are
> typically filed quarterly or monthly depending on the amount owed. And
> once registered, one must file each period even for zero amounts due. With
> a gallery, the sales tax is collected, reported, and the responsibility of
> the gallery (the one making the sale.) Also note that galleries may have
> very different responcibilities to artists as per their state laws. It
> doesn't hurt to understand how to write a good contract when using a
> gallery or agent.
>
> Be especially careful of the use tax. Some think that if they have a tax
> number that they can buy everything sales tax free. This is not the case
> and generally only applies to materials that are part of the product sold.
> For example: If one is selling Pt prints on paper, they could be exempt
> from paying sales tax on purchases of the paper and Pt chemistry. However,
> they may not be able to exempt the sales tax of the film or camera. (These
> taxes can be added to the equipment cost and depreciated or added to the
> material cost and deducted from income as per IRS rules.) And like the
> sales tax, if the use tax is higher than the sales tax paid, then the
> difference is paid as use tax (it doesn't work the other way giving a
> refund, sorry, but that part may be deductable from income.)
>
> If you search your state's web site for taxes and running a business, you
> will likely find all the rules and stuff you need to know. But any
> questions or doubt should be directed to a competent, qualified tax
> professional as suggested by others. Although there have been some stories
> in the news about tax businesses cheating the system. Bottom line is one
> is still responsible and would have to go after the tax professional if
> there is a problem.
>
> As to errors: with income there is the schedule X. But for sales and use,
> a failure to file even a zero return can have significant penalty
> (sometimes one may be able to plead for mercy if they forget a return and
> do not owe anything.)
>
> Bottom line is that an artist selling their work should take it upon
> themselves to learn how to opperate as a business. As Bob has suggested,
> those working in the government revenue departments can be very helpful.
> And all can be found on the web these days.
>
> --
> Jeffrey D. Mathias
> http://home.att.net/~jeffrey.d.mathias/
>
>
>
Received on Mon Apr 24 18:04:48 2006