In what order should I do all this legal stuff? Also, questions about contracts & such. I am new!

[daniela_d]

<p>Hello friends, thanks for all the helpful advice on this forum! I've learned a lot!<br>

I have a question for you - I'm finding myself in need of purchasing liability and equipment insurance for next wedding season, as I've never had/needed it before but I have a venue requiring it (and also to be "additionally insured" which I don't fully understand) SO - I've been searching around for some quotes. However, before I purchase... I don't know if I should be, um, letting the IRS know that this is my source of income? Next wedding season will be my first season being a full time self employed photographer, so this has never been an issue before. I'm early 20s so the extent of my tax paying has been for retail jobs etc... I don't really know how these things work. Do I need to claim the $$ on my taxes before getting insurance? Will I look super sketchy if I get insurance and don't claim the $ yet? Will anyone actually notice or care if I get the insurance first...? Not trying to get out of paying taxes on my photo income, I just actually don't know HOW to and have never had to before... (I'm definitely more of a creative type than a business minded individual...but I'm learning!) but I need to get this insurance asap so I can book this gig where the venue requires it.<br>

One more question that the insurance companies I've been researching fail to have answered for me... if my equipment gets stolen or broken or someone I'm shooting gets hurt etc during a shoot that doesn't have a contract (i.e. small portrait shoot or concert or something) will I still be covered if I have some sort of equipment/liability insurance? I was only requiring contracts for events and weddings... should I change this? Do you all require contracts for everything? I'm sure this would depend on my policy but I am not sure what the usual is...<br>

That's all! Thank you so much!</p>

[john_h.1]

<blockquote>

<p>"I don't know if I should be, um, letting the IRS know that this is my source of income?"<br /><br /></p>

</blockquote>

<p>Go see an accountant and ask what you need to do.</p>

[William Michael]

<p>My point of view is that if one is in business there are three experts that one should have for both advice and action: Solicitor, (aka ‘Lawyer’); Accountant/Tax Agent; and Insurance Broker.<br /> <br /> I expect that you are in the USA because you mention “IRS”. I’d expect that in the US “Public Liability Insurance” (in simple terms meaning insuring YOU in the case of you or your gear causing damage to PEOPLE or PROPERTY) is separate to INSURANCE for LOSS or DAMMAGE to YOUR EQUIPMENT – but I’d also expect that you could get a bundled “business package” that would include both, and maybe also other benefits: that’s what an Insurance Broker’s job is –to tailor fit the policy(ies) to your business’s needs.<br /> <br /> I’d expect that withholding information from the IRS, that is necessary to provide to them, would be illegal – part of what I do know of American History is that’s how some ‘Gangsters’ got caught. In any case as you say you are simply ignorant of what information is required and the form of how that information is to be provided – and that’s how we all started completely ignorant until we learned what was required - and that’s the job of an Accountant or Tax Agent to instruct/advise you .<br /> <br /> Apropos ‘Contracts’ – it seems illogical to me to have contracts for Weddings, but not for a Portrait shoot – logically they are the same, except that a Wedding is a prolonged Portrait shoot. Contracts are the aegis of a Solicitor.<br /> <br /> Some venues require a “level of” Public Liability Insurance Coverage. This is so inside and also outside of the USA: I have found it is usually the more opulent and expensive venues, those which might have valuable facades or furniture etc., and who would generally have clientele who would be wearing expensive clothing and jewellery which if were damaged might cost a lot of money to compensate. Personally we have a $20,000,000 PL Insurance Coverage and that has been enough to satisfy any venue where I have worked.<br /> <br /> Although I do not shoot Weddings now - In my Camera Bag and Computer Sachet, I still carry a few copies of: Insurance Policies outline; Working with Children Clearance; Company Certificates; Business Name Certificates and Tax File Information; and some various accreditations and media passes. Once you have set up your business, having copies of this documentation makes any business dealing with a new Client very quick: and the upside is they see you as professional, efficient and also experienced.<br /> <br /> <strong>Bottom Line:</strong><br /> Bluntly put – You can choose from two types of Businesses Structures: <br /> <br /> 1. One type is based upon “I am doing this as a sideline gig and also as a bit of an hobby and I don’t think that I need insurance, contracts and all that fuss, it will be OK – anyway all that stuff costs a lot of money.”<br /> <br /> 2.The other type of business has the three elements that I have outlined above professionally set up and usually has the three experts called in to assist in the areas of: Tax and Accounting; Contracts and Legal matters; Insurances. And yes that all does cost money and that is a part of the cost of doing business.<br /> <br /> To answer your question about the order of doing things: it occurs to me that you might not yet have either: a business definition; nor a business plan. I’d advise that you take a step back and define exactly what your business is; and then make a business plan to execute that. After you have defined your business, the first part of the business plan, I suggest, is to build a scaffold in which the business can operate – and if your business is defined more akin to the second type of business I described, then you will probably need to get in touch with those three experts that I have mentioned.<br /> <br /> WW</p>

[craig_shearman1]

<p>1) Insurance and paying your taxes have nothing to do with each other, aside from the fact that the cost of the insurance is a tax deductible business expense. Go ahead and get the insurance regardless of what you do with taxes.<br />2) You need insurance both for damage/loss of equipment and for liability. If someone trips over your light stand and breaks it, that's what the damage/loss coverage is for. If someone trips over your light stand and sues you, that's what the liability coverage is for.<br />3) Needing insurance has nothing to do with whether you have a contract for a specific job. Things still get lost/broken and people can still sue.<br />4) Pay your taxes. if you get paid $100 cash here or there that's one thing. But when photography becomes your sole source of income the IRS will eventually catch on and they do not have a sense of humor. And it's more than just filing in April -- you might have to pay quarterly estimated taxes through the year. And don't forget state income tax in addition to federal. The up side is that most of your business related expenses -- not just photo equipment but your internet service, your cell phone, mileage on your car, etc. -- all become deductible. Including the insurance.<br />5) Pay all your taxes, not just income taxes. Depending on your state, you may be required to collect sales tax.<br />6) For details, talk to an accountant. And have an accountant do your taxes every year instead of doing them yourself. That way when you have tax questions from time to time (and you will as a business owner) you can call him. And if you have tax problems, it's his job to fix them.</p>

 

[daniela_d]

<p>Thank you so much for these thoughtful responses, they are sincerely appreciated! I will DEFINITELY be getting an accountant to work out my tax info... I don't even know where to begin with that, so that is a must. As William W wrote I definitely want to go with your "#2" business structure, trying to make this venture as legit as possible!<br>

Thanks for all the suggestions and I'll be securing some insurance tomorrow!! I'm going through R V Nuccio & Associates - does anyone have any experience with them? Negative or positive? They gave me a great quote for both liability and equipment insurance so I'm a little skeptical at HOW GOOD the price was.... any experience?<br>

Thanks again so much!</p>

[Marcus Ian]

<p>Income is income, regardless of where it comes from, and regardless of how much it is. While getting paid small amounts under the table is not usually that big a deal, if you are shooting regularly, you should be paying your taxes on that income. I would assume that you've been getting paid regularly enough to go 'full-time' - you are required to pay income taxes on that income - even if it is not your primary source of income.</p>

<p>While an accountant can do all this for you - though it's not rocket science- the days of a 1040EZ are over for you. </p>

<p>And you can get insurance anytime (sooner is better IMO). As far as the coverages go? That depends on the policy, and the provider. But in general you should require contracts for ALL professional shooting. Maybe you have a couple different types of contracts for different types of shooting, but not only does it cover you (and ensure that your insurance is in effect), it also helps keep things (and the accounting) organized.</p>

[katrin_d.]

<p>If you're not a member already, join PPA (Professional Photographers of America), they have massive amounts of resources for every aspect of your business. As for insurance, I pay around 600 Dollars a year for 30K worth of equipment, liability as well as error & omissions through Hill & Usher because they specialize in photographers specifically (not sure if links are allowed - here it is just in case: http://www.packagechoice.com/index.jsp#htwms) and are underwritten by The Hartford.</p>

[craig_shearman1]

<p>Not familiar with R V Nuccio and have no reason to think anything is wrong with them. But before you sign anything, look at what Katrin sent about PPA and Hill and Usher. H&U is probably the best known company specializing in insurance for photographers. They know what photographers need and their pricing through PPA is probably better than what you can get on your own.</p>

[shawn_mertz]

<p>before you can get business liability insurance you need to create the business. most states you can start the process online. but follow william's advice and consult the three experts before creating business. it is a big commitment.</p>

[craig_shearman1]

<p>"before you can get business liability insurance you need to create the business."<br /><br />Not necessarily, since you don't necessarily have to set yourself up as a "business" per se.<br /><br />There are many forms your business can take. But as an individual photogrpaher working freelance from your house or your car you don't necessarily have to set up a formal business structure. You start taking people's money and pay your taxes and that's its. Friend of mine was a freelance news photographer for 20 years and was never incorporated, had a busines license or anything. He was basically "self employed." Things get more complicated if you set up a storefront studio, sell products or provide services that are subject to sales tax, hire employees, etc. Requirements vary from state to state.<br /><br />There are advantages to certain business structures, among them protecting your personal assets against liability in case the business loses money or gets sued. Be sure to talk to an accountant, lawyer, etc.</p>

[William Michael]

<blockquote>

<p>Shawn: "before you can get business liability insurance you need to create the business."</p>

</blockquote>

 

<blockquote>

<p>Craig: “Not necessarily, since you don't necessarily have to set yourself up as a "business" per se. But as an individual photogrpaher working freelance from your house or your car you don't necessarily have to set up a formal business structure. You start taking people's money and pay your taxes and that's its.”</p>

</blockquote>

<p>We are a global forum – so just a cautionary note -<br>

Noted that we have established that the OP resides in the USA, though we do not know which State, Territory, Commonwealth or District.<br>

Even if what Craig says is correct for all jurisdictions of the USA, (and I have no idea so I make no comment on that point) - BUT readers should note that such might not be the case for other areas of the world: and it isn’t.</p>

<p>WW </p>

[daniela_d]

<p>Hi again - thanks so much for all your thoughtful replies. Truly appreciated!<br>

I've acquired business insurance - and after I did the next two clients that reached out to me required it as well... so that worked out nicely! Accountant is next on my list! Much, much needed.<br>

And just for the info, I'm located in RI, USA, and was able to purchase insurance without first establishing my "business" to be something more than "self-employed." Thanks again for the info and insight!</p>