| FROM THE CUBICLE |
‘em down! Discount clubs are great for
things like batteries, coffee, water, beverages and snack items for your studio.
8Make a list, and stick to it. Make lots of lists! How about a list of areas within
your business where you can save money?
9Reward yourself. I know this one is counter-intuitive, but if you don’t
reward yourself now and again, what fun
is it? Go ahead, get the extra-large fries
once a year!
For the rest of the column, I turn to
an expert, Nathan Reynolds, who runs
Rubix Accounting ( http://rubix.info),
specializing in accounting for photographers (and, in full disclosure, is also
my accountant). While his tips are more
savings-based, Reynolds offers excellent
advice for those of you just getting your
business running. A great start is your
best bet to a successful future!
Factor In Retirement
If you’ve recently left a position as an employee, this is one benefit you’ve most likely
had to give up. But it can actually be quite
simple to set one up and save money at tax
time. Establishing a SEP-IRA could be the
best option if you are self-employed. Bonus:
The option to set up and make a retirement
contribution could still be available for your
Knowing when to use them and how much
to pay them can be enough of a challenge.
But you also need to make sure you know if
the IRS will consider them an employee (for
which you must file a W- 2) or independent
contractor (for which you must file a 1099).
Unfortunately there is not a quick answer
for this one. Check out IRS Publication
1779 or ask a tax professional for help.
Structure Your Business
Starting out, most photographers are con-
Open A Bank Account
sidered sole proprietors and file their taxes
with their personal return using an extra
form, Schedule C. Once your business is
growing, switching to an LLC can provide
a wall of separation between your personal
assets and an unfortunate business liabil-
ity. When your business becomes highly
profitable ($50,000+ in net income), opting
to become a Sub-S Corporation can yield
substantial tax savings.
Having a separate bank account for your
business is a must. You will attract unwanted attention from the IRS if you mix
all your personal and business funds into
one account, which they call commingling.
Most banks require little more than a business name and a Tax ID number to get set
up with a business bank account.
Take Out An Insurance Plan
Nothing will destroy your business quicker
than being liable for an accident with no
way to pay for it (think accidentally breaking something while on a shoot). In the
wedding and portrait world, having liabil-
Accountant Nathan Reynolds says having a home office—versus paying rent for studio space—can save you a great deal of money.