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DPChallenge Forums >> Business of Photography >> Sales Taxing from a minor
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Showing posts 1 - 14 of 14, (reverse)
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 03/28/2008 12:52:55 PM · #1
Hello, all your knowledgeable photography gurus!

The local coffee shop is going to allow me to display and sell my photography in their building in the months to come. I've read around on the forums and it seems like I will at least need to register with the IRS and get a Taxpayer ID Number and register with the state tax agency to get a sales tax ID. I'm 16 (17 end of April) and I was wondering if the process will be any different because I am a minor?
I'm very excited about this opportunity, but I want to be legal before I sell. ; )
Any information, help, advice is welcome!

_Nathanael
 03/28/2008 12:58:50 PM · #2
Alot of this information depends on your state. For example, in Washington as a photog, you dont have to get any licenses, etc, unless you make over $15,000 a year in photography. Call some of the business services in your state, they will know best
 03/28/2008 01:14:13 PM · #3
Give the work to the shop "on consignment". They will sell the prints, charge the tax to the customer, etc, then split the proceeds with you based on the consignment contract. That beats the heck out going through the Franchise Tax Board hoops for a small-scale exhibition. Incidentally, if you are not operating as a corporation, a partnership, a DBA, whatever (if you just sell stuff under your own name) then your Social Security Number is usually your taxpayer ID number ΓΆ€” unless something has changed.

R.
 03/28/2008 01:20:12 PM · #4
Yes, you are correct, you can use your Social Security Number as your TAXPAYER ID Number.
 03/28/2008 01:29:36 PM · #5
If your business is a sole proprietorship -- you are the only person who owns it -- then you can file your Federal taxes for the business on Schedule C of Form 1040 and use your social security number. You should only need a separate taxpayer ID number if you have employees.

Nolo Press has a lot of good books on setting up and running a business, and your library may have some of them.

Message edited by author 2008-03-28 13:29:53.
 03/28/2008 01:37:47 PM · #6
SCORE is a great resource. They offer free small business counseling. Contact your local branch and they will have all the information for your state and city requirements and will meet with you to assist in planning your business.

Congrats on your showing! That's great!

03/28/2008 01:39:05 PM · #7
Originally posted by GeneralE:
If your business is a sole proprietorship -- you are the only person who owns it -- then you can file your Federal taxes for the business on Schedule C of Form 1040 and use your social security number. You should only need a separate taxpayer ID number if you have employees.


Right. The big issue here is dealing with the State Franchise Tax Board, collecting sales taxes and paying them to the state. It's a major hassle. To be avoided if at all possible. Consignment is the way to go, if the Cafe is willing.

R.
 03/28/2008 03:34:43 PM · #8
Declare income as hobby income on your federal income tax(if you make enough to file).

Some states allow you to collect and send them sales tax without a sales tax certificate, you just put it on your regular state income tax return, so long as the number is below some certain threshold.

03/28/2008 04:09:06 PM · #9
You don't need a federal EIN (employwer ID number) unless you have employees. Your social security number is all you need.
Yeah, it'll probably be a hobby business. Talk with your parents though - they no doubt claim you as a dependent and your making money will / may affect them. Depends on how much you make of course. As a hobby business you can't deduct all the expenses you can for a full time business. I'm not sure what the specifics are, but I'm sure you can deduct something, so you'll need to know what and keep records of it.

As to sales tax, see you state for info. Probably have to have your parents get the sales tax number - better yet let the shop collect the money and tax, and you let them keep a percentage of the sale for their trouble (10 to 20%)
 03/28/2008 04:20:30 PM · #10
Originally posted by Prof_Fate:
As a hobby business you can't deduct all the expenses you can for a full time business. I'm not sure what the specifics are, but I'm sure you can deduct something, so you'll need to know what and keep records of it.

For a hobby business you can deduct expenses up to the amount of income generated but no more, so you essentially end up paying no tax on that income. With a real for-profit business you can declare a net loss (though not too often, unless you are an airline).

If your parents are still claiming you as a dependent, then I think you just add all the income and expenses into their tax return ...
 03/28/2008 09:04:05 PM · #11
Fantastic information all! Thank you so much.

Originally posted by Prof_Fate:
As a hobby business you can't deduct all the expenses you can for a full time business. I'm not sure what the specifics are, but I'm sure you can deduct something, so you'll need to know what and keep records of it.


Any idea where I can find this information? I found a NOLO book on starting a small business in the house, maybe there?

Originally posted by Prof_Fate:
As to sales tax, see you state for info.


I know I'm really ignorant, but where do I go? Is there an office that represents the state or do I go to the courthouse or what?

Originally posted by Prof_Fate:
Better yet let the shop collect the money and tax, and you let them keep a percentage of the sale for their trouble (10 to 20%)


They shop has displayed others art, but they always kept it apart from their sales, just asking any buyers to write a check to the artist. This may be at the artist's request, though, I'll have to ask and see.

Again, thank you all for the information!
 03/28/2008 10:42:52 PM · #12
Originally posted by Nathanael_G:
Originally posted by Prof_Fate:
As to sales tax, see you state for info.


I know I'm really ignorant, but where do I go? Is there an office that represents the state or do I go to the courthouse or what?

If you are in the State of Mississippi, try here. If you are in another state, use your state's two-letter postal abbreviation in place of the "XX" in this type of url to find the state's official site:

www.XX.gov
 03/29/2008 10:22:08 AM · #13
Originally posted by GeneralE:
Originally posted by Nathanael_G:
Originally posted by Prof_Fate:
As to sales tax, see you state for info.


I know I'm really ignorant, but where do I go? Is there an office that represents the state or do I go to the courthouse or what?

If you are in the State of Mississippi, try here. If you are in another state, use your state's two-letter postal abbreviation in place of the "XX" in this type of url to find the state's official site:

www.XX.gov


Thank you, GaneralE! You're a Godsend.
 04/02/2008 12:55:37 PM · #14
Ok, I filed for the Local Tax Registration Certificate and they called me and said I had to pay a $300 bond because I'm doing the work at home as well as going outside the home to actually take the pictures. Ack! That's a huge sum of money for me, is there some kind of miscommunication here?
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