| FROM THE CUBICLE |
ity insurance along with coverage for your
equipment is second in importance only
to a strong data backup plan and backup
equipment. Coverage can actually be quite
cheap and readily available through photography organizations.
Don’t Forget Sales Taxes
This is one of the most commonly overlooked areas when transitioning from a
hobbyist to pro. All but five states require
you to collect sales tax on the products
you sell (Kristin Korpos goes into more
detail about this on page 66). An increasing number of states also require photographers to collect on session fees as well.
Between varying rates, multiple deadlines
and over 11,000 local jurisdictions, sales
taxes should be high on the list for the
need to seek professional advice.
Home Office Write-Off
Having your office at home can save you
a great deal of money versus paying rent
for studio space. You can also take a tax
deduction to save even more at tax time.
But beware, abuse of this deduction by
taxpayers has invited higher scrutiny by the
IRS. The part of your home that you claim
for your office must be used 100 percent
Estimate Your Taxes
Self-employed business owners are responsible for additional taxes and payments.
Since you don’t have an employer making
regular payments on your behalf, the IRS
and most states require you to make quarterly tax payments. A tax professional can
help you keep track of when and how much
to avoid interest and penalties.
Having a simple and efficient process for
saving receipts can make a small business
owner’s life very happy, especially at tax
time. Since the IRS considers most digital
versions as acceptable as the original, con-
sider a digital workflow. We recommend a
smart phone app such as JotNot or Doc-
Scan to digitize your receipts. These apps
can then upload your receipts to Dropbox,
Evernote or Google Docs in order to cat-
egorize and archive them.
Most creatives are dreamers who aren’t
detail-oriented. But it’s still important to
have a system in place to record and summarize your business transactions (which
is the most basic definition of accounting).
For DIYers, consider these: the rudimentary (Excel), the robust (Quickbooks) or online (Freshbooks or LessAccounting). (For
more suggestions turn to page 50.) If you
are too intimidated by the details of accounting or are just tired of the headache,
consider outsourcing your bookkeeping
and taxes to a professional. RF
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