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Thread: I guess pros are better after all...

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    Super Duper
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    I guess pros are better after all...

    And interesting article on the difference between pro and amateur photographers:

    Study Finds that Professionally Captured Photos Are More Memorable Than Amateur Ones

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    Subscriber Member Jorgen Udvang's Avatar
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    Re: I guess pros are better after all...

    If they change "pro" with "skilled", I agree.

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    Senior Member Tim's Avatar
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    Re: I guess pros are better after all...

    Comes back to that old chestnut of what is the definition of a Professional Photographer.

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    Re: I guess pros are better after all...

    A person that derives their income from photography. Is there another definition?

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    Administrator Bob's Avatar
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    Re: I guess pros are better after all...

    Once a Pro, it is very difficult to regain amateur status, however not the other way.
    An amateur forfeits his amateur status by accepting money greater than $750.00.
    Or do I have the wrong game?
    -bob

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    Re: I guess pros are better after all...

    Bob, the IRS will not classify you as a professional where you can claim expenses if you only get $750. Unless, of course, your annual income is just $1000. But I really don't think we are talking about high-school students living at home.

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    Re: I guess pros are better after all...

    Quote Originally Posted by Shashin View Post
    Bob, the IRS will not classify you as a professional where you can claim expenses if you only get $750. Unless, of course, your annual income is just $1000. But I really don't think we are talking about high-school students living at home.
    I'm not sure that is true. The IRS doesn't engage in arguments as to what constitutes a "Professional" in any field. All they care about is their "pound of flesh"

    One can make $100K in your regular career, and have a side business or LLC etc. ... the IRS wants its' cut of your income regardless if it is only $750 on the side.

    Business involves taxes on profits from any enterprise after "cost of doing business" expenses deductions ... however you have to show a profit in one of three years, or you forfeit the business deduction status (i.e., it is a hobby in laymen's terms).

    If you make $750 selling your hobby photography, and do not claim any business expenses, it is still income and subject to income tax.

    - Marc

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    Re: I guess pros are better after all...

    a business has to file a Schedule C; an individual a schedule 1040, a sole proprietor, both. the only way you can deduct business expenses is via Schedule C, though income from anything could go in either or both filings.

    in my state (NY), you also need to file for a business license and that is required to open a business bank account.

    in my opinion, you aren't really a "pro" in any business unless you are above board with licensing, liability and worker's comp insurance, IRS and your bank

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    Re: I guess pros are better after all...

    Just got my renewal license from the state to sell/collect state sales taxes. I also just filed and paid my state sales tax for January. In the process of filing my fed and state income taxes which include reporting 1099-misc from royalties as well as the Schedule C and reporting on 179 expenses from last year. Every year I spend close to 40-hours doing our taxes in-between time processing new files and selling the occasional print.

    I agree with John, unless you're dealing with the state licensing, and sales tax, insurance, IRS and your bank and all the other bulls#^t that goes on with owning/running a business you might not be a pro.
    Don Libby
    Iron Creek Photography
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    Re: I guess pros are better after all...

    Quote Originally Posted by fotografz View Post
    I'm not sure that is true. The IRS doesn't engage in arguments as to what constitutes a "Professional" in any field. All they care about is their "pound of flesh"

    One can make $100K in your regular career, and have a side business or LLC etc. ... the IRS wants its' cut of your income regardless if it is only $750 on the side.

    Business involves taxes on profits from any enterprise after "cost of doing business" expenses deductions ... however you have to show a profit in one of three years, or you forfeit the business deduction status (i.e., it is a hobby in laymen's terms).

    If you make $750 selling your hobby photography, and do not claim any business expenses, it is still income and subject to income tax.

    - Marc
    Yes, IRS will take tax from all income, but making $750 from a photograph, as Bob claims, does not mean I am no longer an amateur. Yes, the IRS does not define if you are a professional, but it does decide if you are a business and if you are getting paid as an employee doing photography, these make a difference, not the $750 bucks. If you are making money doing something, it will be the IRS that decides if you a for-profit entity, not the earnings.

    I might be wrong, but the IRS is always right, whether they make a mistake or not...

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    Re: I guess pros are better after all...

    Quote Originally Posted by jlm View Post
    a business has to file a Schedule C; an individual a schedule 1040, a sole proprietor, both. the only way you can deduct business expenses is via Schedule C, though income from anything could go in either or both filings.

    in my state (NY), you also need to file for a business license and that is required to open a business bank account.

    in my opinion, you aren't really a "pro" in any business unless you are above board with licensing, liability and worker's comp insurance, IRS and your bank
    Yep, Fotografz, LLC files a Schedule C with 1099C documentation from reporting clients (ad agencies, etc.), my own 1099 reporting from wedding photography and portrait work; pays the State of Michigan an annual corporate licensing fee ... and Fotografz LLC carries business insurance called "Store Pac" Photo Studio from Travelers Ins. Co, including liability for me and any subcontractor I may employ (BTW, there are many venues that will not allow "Professional" photography without proof of this type of business insurance). It is a PITA being a responsible "professional" :roll eyes:

    Not sure if workman's comp insurance is needed to qualify if it's a sole proprietorship using sub-contracted second shooters and assistants. I also do not have a separate bank account anymore because the banks wanted too much to maintain one compared to the level of income and (wedding) seasonality involved as I move toward retirement. I use a corporate American Express for Fotografz, LLC to manage spending and track expenses.

    What makes it competitively difficult are the shooters that take the mantle of "Pro" and do none of the above ... if they loose part of, or an entire wedding, have an accident, etc. ... they just fold their tent.

    - Marc

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    Re: I guess pros are better after all...

    worker's comp can be a pain. first, the rate is determined by the work category (ranked by accident exposure; carpenters (table saw injuries) being quite high), and varies state to state. if you get a WC audit, they expect you to show that anyone you hired as an employee was covered by WC or they will back charge you, and they audit your payroll. if you contract a subcontractor, the sub has to provide you with a certificate showing he provides his own WC coverage, or you can be held responsible for paying WC on whatever you paid out to him, and on the gross you spent, not just on the wage portion of his work.
    i pay a rate from 11% to 18% depending on the job description (which has to fall into a WC category) and that % is based on the actual gross salary paid.

    i build 20% of salary as overhead into my budgeting; (employers also pay half of the Soc. Security payment, also based on salary)

    ethically speaking, it is in everyone's interest to have anyone working covered by WC so there is guaranteed insurance should there be an accident. something as simple as a gaffer tripping on a cord can leave an individual with a healthy medical bill.
    first thing they ask in the ER is whether you were injured on the job and then for the WC coverage.

    similar argument for having liability insurance; should your tripping gaffer fall into the client's Cezanne...or just break a window, it is only fair that there be funds available to cover the compensation. hells bells, i think bicyclists should have liability insurance

    I doubt those overseas companies making inexpensive camera parts are paying any of the above, nor anywhere near what we pay in wages, not to mention working conditions. should make you think twice about what that dollar savings is promoting, both in terms of the overseas worker and what it does to our home grown industries that have to compete globally.

    rant over
    Last edited by jlm; 3rd February 2015 at 15:13.
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    Re: I guess pros are better after all...

    Actually, my business insurance covers liability against sub-contracted second shooters and assistants, which includes injury. Michigan doesn't require I get WC proof from a subcontractor. I also carry $2,000,000 in personal liability above and beyond the business policy.

    Another wrinkle to the burden of running a small business in Michigan is County taxes on inventory. Each year you are supposed to take inventory of all owned assets and pay a county tax on it. If you are a really small enterprise they often will wave that requirement ... at least they did for me.

    I'm now splitting time between Florida and Michigan which has complicated things ... time to fully retire and just shoot for fun

    - Marc

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