Found advice on here about trying to start a wedding photography business.

Found advice on here about trying to start a wedding photography business. The advice I found was do not get a business license at first and try a couple of weddings and see if you are going to stick with it or not. All may not agree on it but my question is in California it sounds like the total price charged is taxable. Is that correct? Then if so how do you report sales tax if you don't have a license? And if the reply is don't then I would ask about my bank, they opened us a business checking account without a business license and or fictitious name. Does the bank report income deposited into that to any one? I am only asking in case this business does not take off what do I do about sales tax?Found advice on here about trying to start a wedding photography business.
You are correct about the entire selling price charged to customers being subject to sales tax in CA. In order to report the sales tax , you need to get a seller's permit with the Board of Equalization. You don't need a business license to apply for a sellers permit. There is no charge. Follow the link provided to find your local BOE office. If your business does not take off, it is easy to close your permit.


If you don't get a seller's permit, but get audited by the BOE, the auditor will look at your bank accounts, both private (if you are a sole proprietor) and business. They can get a subpeona if you don't hand the statements over voluntarily. If you can't prove otherwise, the deposits will be considered taxable income. The BOE exchanges information with the FTB (CA income tax) who exchanges info with the IRS, so you could get audited by all three.Found advice on here about trying to start a wedding photography business.
Check with the county clerks office and get all required licenses and permits. Consult with a tax attorney on the sales tax issues, laws vary from state to state. Also consult with an accountant to set up your books or take an accounting course, you want to be able to see how your business is doing, with the accounting books you will never know if you being successful or not.
Why not pay a visit to an accountant, tax adviser, attorney, or even your banker to start? I, for one, would not trust financial advice coming from a bunch of strangers here on Y!A.





*EDIT*


I did not mean to say any particular person's advice was bad. But asking on a forum like this is a crap shoot. You'll have some people who know what they're talking about, and some with who don't. Also laws are different from state to state. I just thought it would be a great idea for the OP to check with a trained person in his area. Sorry if I stepped on your feelings, J-Man, no harm meant.
Here in NC the license for photographer's is $50 per year. Not too bad. But, we also only have to charge tax on goods, not services. So, my time is not taxable, but my prints, etc. are. If I do a bundle that includes X number of hours and X number of prints, then the whole amount is taxable and must be reported as sales tax.





HOWEVER, by setting this up as a business I am also able to take deductions for my camera, supplies, travel, advertising, bank fees, checks, business cards, etc. etc., even a part of my home since I have a home studio, all on my personal tax returns. This will be my first full year, I showed a loss last year for the partial year and will show one again this year. But as long as I have *some* income each year I can keep showing a loss for a while. And, since I still have a day job, that can result in more money coming back to me at refund time.





Our accountant is the most honest you will ever meet. So, for NC at least, this is all above board.
Generally speaking (I'm no tax lawyer ) I believe you have to make over a certain amount of income to be liable for income tax.


Your best bet is to keep all your business associated documents together in one place, preferably in chronological order and at the end of the year have your tax preparer go over them.


As for a business checking account, I don't know how you opened one with out a valid tax ID #, for which you would need a registered business name. I'd just open up a plain old CA, in your name, and have your ';clients'; make checks payable to you.





One other note, as a former small business owner (photography) I can advise you to get some training in running a small business. Sadly the best shutterbug in the world won't stand a chance against others who are better at marketing and general business. It was the shortcoming of my little endevour...





THX: Ara57, No harm, no foul and I did'nt thumb down ya, matter of fact I'm gonna give you a thumb up just because someone did.