Selling Photo Prints?

[LightCaptured]

I have decided that I want to sell photo prints. Not as a full time job, more on a part time, free lance basis. I am not sure I will make a major profit, and if I do, not any time soon as I slowly build-up a business (and I know the compeition is fierce as with any form of art).

I have been doing research and I am still a little confused on whether I would be a "hobby" or "business" on tax forms. I also wanted to know what else I need to do on the legal end of things. If I am printing photos at home (apartment) and selling them, even for a small profit, I assume I still need a permit? Or if I operate on light sales (under that $400 mark) at first, I can simply consider it a hobby? Do I need a permit for hobby sales?

All of these questions are for people based in the U.S.

Thank you for any help! I'm just trying to navigate all of the websites I have looked at, and with so much information, it has become a little confusing. I just want to make sure I start off right. I'm not rushing into anything, but some advice would be great. Thanks in advance!

 

[unfocused]

You might want to start here.

From what I can tell, the main difference between hobby income and business income is that if you show a loss as a business it can reduce your overall tax bill, while with hobby income, a loss is not going to reduce your taxes. Be aware though that if you consistently show a loss in your business, it can trigger an audit and the IRS may determine that it is actually a hobby. You might have to pay back taxes if you deducted the expenses as a business and the IRS finds it's actually a hobby.

Most jurisdictions allow people to operate a business out of their home within certain limitations. It can depend on your local zoning. Check with a local planning and zoning office. You will probably need to register your business name and advertise your intent to operate a business under that name. Many communities have small business development centers that offer workshops on starting a business. Because the rules vary from jurisdiction to jurisdiction, I'd recommend starting with the local Small Business Development Center.

Business or hobby, you will need to collect sales tax on any prints you sell. Again, talk to the Small Business Development Center.

 

[MrFotoFool]

I realize this is an older post, but I will reply in case you (or anyone reading this) still need help. This is based on personal experience. There are two separate and unrelated issues when it comes to a photography business, no matter how small. One is federal income tax and one is local (city/county/state) sales tax. If you are selling anything you do need a local business license to report sales tax (unless you live in a state like Oregon that has no sales tax). Typically they ask for a monthly statement and you send the city or state whatever the sales tax percentage is for that month's sales. If you had not sales you just report zero on the form (which can be either a piece of paper or an online form). For federal income tax you only report it if you have made a profit, meaning your income outweighs your expenses (including travel, camera equipment, etc). For most of us (myself included) this doesn't happen so you don't need to report it. The state sales tax people do not connect with the federal income tax people so there is no issue in reporting to the former but not the latter.