We just did our taxes, and it made me think of a few things that every self-employed photographer should be doing. I’ll try blogging about several of these things over the next few days, starting with a VERY important one right now…
If you are charging other people for your efforts, you need to be doing this, too:
www.window.state.tx.us/taxinfo/sales/
Of course, this form is for businesses in Texas, but the basic idea is the same for all states. If you are selling something, you should be collecting sales tax. If you are collecting sales tax, you had better be giving it to the government!
To make a long story short, this is completely different from the federal IRS stuff that you see H&R Block for every year (or maybe you are lucky enough to be filling out a 1040ez form on your own). This has to do with state sales tax, just like when you buy a dvd or a bottle of shampoo. The price of the item is ten dollars, but you leave the store in Dallas paying $10.82 (each state will have a slightly different percentage of sales tax).
The store doesn’t keep that eighty two cents. They give it to the state. I also collect sales tax on any business transaction that doesn’t have a valid reason to exempt it (certain charities, businesses, and other situations allow for the tax to be waived). I send the money to Austin every January. This keeps everything I do on the straight and narrow. I don’t need any government employees knocking on my door over something so simple to do.
Sure, if you are only doing a couple paying gigs per year, you can slide under the radar and not get caught, but anybody making a part-time living or better NEEDS to be collecting and paying state sales tax. There is no way around it, except the illegal way. So, do it.