8 Steps to Make Your Photography Business Legal
Do you have all your business ducks all lined up?
Is your photography business set up legally?
Have you set up your business with your state and the federal government yet? Do you even know how to do that?
If not, no worries! This blog post is for you!
I know how overwhelming it is to get your business legally set up (I was once overwhelmed by this process too), but here are the 8 steps you need to make your photography business legal!
Step One: Choose Your Business Name
You likely already have this part nailed down as this is arguably the easiest step in the whole process! If you have chosen to name your business anything other than your name, you'll want to verify the trademarks by going here!
Step Two: Select Your Business Structure
There are some options, but the two most popular are:
Limited Liability Company (LLC). An LLC protects personal assets of a business owner from lawsuits. For example if you are photographing a wedding and you're in a car accident on the way over and you end up missing the ceremony, you'll have an upset bride, but she will not be able to sue for your personal assets (like your home).
Sole Proprietorship. This is the easiest type of business to establish and has fewer government regulation. Within this business structure, the unincorporated business has just one owner who pays personal income tax on profits earned from the business.
For the majority of photographers I mentor, I tend to recommend an LLC as it provides an added layer of protection for you and your assets. Regardless of which structure you chose, you'll need to complete your state forms and pay a fee.
Step Three: Get an Employee Identification Number (EIN)
This sounds scarier than it actually is, but you can complete this step in a matter of minutes and all online! Go here and complete the forms to get your EIN.
Step Four: Separate Your Finances
Do not mix your personal account with your business expenses! It is important to keep track of all your business related expenses separately than your personal expenses. So take a few minutes and open up a business banking account. You can likely do this at the bank you currently use to manage your personal accounts.
Step Five: Register to Pay Sales Tax
Every state deals with sales tax differently so it's best to google "How to Get Sales Tax ID In Your State Name." You'll have more forms to fill out, and once they are complete, you'll have your ID number and will be able to pay. You'll likely your state commission every quarter or every month (so once you complete your state's paperwork, go ahead and schedule playing your sales tax in your calendar so you don't forget)!
Step Six: Pay Federal Tax
Yes, there are more taxes! No way to get around this. If you are not now, I encourage that every dollar that comes into your business, you set aside 25%-35% into a separate tax savings account so when it comes time to pay your taxes, the money is there. You'll be paying the federal government every quarter or year and you can set up payments on the IRS website here.
If you are not sure how to price your work or manage your business income properly so that you are prepared to pay your taxes, grab the free Profitable Photographer's Calculator!
Step Seven: Get Insurance!
This step is not required, but is smart. You'll want to double check as sometimes your home owner's insurance will over your camera gear and laptop. If not, getting liability and equipment insurance will enable you to replace things if you lose or break something while on the job!
And finally Step Eight: Get Your Contracts
It's best to never, ever, ever photograph a session or wedding without a contract! A contract will clearly lay out expectations and will also include a model release so that you can use your client's images for promotional purposes. We have sample contracts in our Mentorship so if that's something you'd like help with, learn more about The Booked Photographer Mentorship here!
Whew! Getting legal covers a lot, but now you know exactly what to do to make it official and to protect your business!
If you're curious to learn uncomplicated and easy method we use to help photographers consistently attract their ideal clients and earn a comfortable living doing what what the love grab your copy of The Becoming Booked Method Ebook here!
Cheering you on!
Heather