How to Start a Photography Business!
Written by Kevin Titus Photo
In this article, I’m going to cover, step-by-step, how to start a photography business in North Carolina.
Don't worry, if you live outside of North Carolina, you'll still find this post helpful. Just be sure to check the local laws in your city and state.
One last disclaimer: The information in this article is NOT to be taken as legal advice. My aim is to simply break down the process of how to start a photography business to the best of my knowledge and experience. Please do your due diligence and talk to a professional if you need help. I’ll link to some resources at the end of this post.
how to start a photography business
Step 1) Choose a Business Structure
If you’re a one-person show, you’ll most likely need to choose between either a Sole Proprietorship or a Limited Liability Company (LLC). Let’s examine the differences.
If you’re just getting started with your photography side-hustle, operating as a Sole Proprietorship is a great option.
What’s nice about this option is you’re automatically considered to be a Sole Proprietorship if you don’t register as any other business structure. It also doesn’t cost anything. (You’ll still want to file your Assumed Business Name Certificate, also known as a DBA. More on that in a minute.)
The downside of operating as a Sole Proprietorship is that you’re personally responsible for all of the debts and liabilities of your business, which means if you happen to get involved in a lawsuit, creditors could go after personal possessions (savings account, car, house, etc.)
Limited Liability Company
As an LLC, your personal assets are differentiated from your business assets, which means it may offer limited personal liability.
When I first started out with photography, I operated as a Sole Proprietorship because I wasn’t sure how sustainable my business was going to be.
After a few years of shooting, I decided to leave my day job to do photography full time. That’s when I filed to be an LLC. Since I now depended on photography for a living, I needed more protection than a Sole Proprietorship could offer me.
When deciding between operating as a Sole Proprietorship or an LLC, consider how self-employment tax (Medicare and Social Security taxes) factors into the equation.
Whether you’re a Sole Proprietorship or a single-member LLC, you’re required to pay self-employment taxes on your entire net income.
But this is where operating as an LLC can provide a big tax advantage over being a Sole Proprietorship.
As an LLC, you have the option of filing your taxes as an S-Corporation. If you file as an S-Corporation, you only pay Social Security and Medicare tax on the salary you pay yourself, not the entire net income of your business.
Keep in mind, operating as an LLC involves more paperwork and regulation. For example, you’re required by law to file an annual report for your business, which costs $200. You’ll also need to keep your personal and business bank accounts separately to avoid what’s called “piercing the corporate veil.”
If you’re overwhelmed or confused by any of this, please consult a tax professional or accountant for help deciding what’s best for your business. The Business Link North Carolina team is a good place to start if you have any questions. Their services are free and they’re an incredibly helpful resource.
To file as an LLC, complete and submit the Articles of Organization form. (If that link doesn’t work, the form is on this page of the Secretary of State website. Just choose “Limited Liability Companies” under the “For” dropdown list.
Don’t let the term “Articles of Organization” intimidate you. It’s just a two-page document.
The cost to submit your Articles of Organization is $125. You can do this online by visiting this webpage.
Step 2) File your DBA
Once you've chosen your business structure, you'll need to file your DBA, which stands for "Doing Business As."
A DBA is required if you want to operate under a name that's different than your own (Ex: Kevin Titus Photo instead of Kevin Kleitches).
It’s important to know that you’ll still need a DBA even if you only want to omit the word "LLC" from your business name. For example, I didn't want to have "Kevin Titus Photo LLC" on my website and all my marketing materials (I thought it looked stuffy), so I filed for a DBA so that I could simply use "Kevin Titus Photo" instead.
Print and fill out the Assumed Business Name Certificate (Form A) found on the Secretary of State website (don't forget to check that the name isn't taken!) and bring it to your local Register of Deeds office.
If you don’t want to submit the form in-person, you can upload the form online.
The fee to file the DBA is $26.
Step 3) Obtain Your Employer Identification Number (EIN)
If you choose to operate as a Sole Proprietorship, you’re not required to have an EIN (also known as Federal Tax Identification Number) since you can use your social security number instead.
However, if you register your business as an LLC, you ARE required to have an EIN to open a business bank account, or if you hire employees.
Some companies will charge you a $75 “filing fee” to do this for you. SAVE YOUR MONEY!
This process is super quick and does not cost anything.
Head to this page of the IRS website and click on “Begin Application.” Follow the steps to complete your application, and once you submit it, you’ll immediately receive your EIN via email.
Step 4) Get Your State Sales Tax ID
Whether you’re selling physical prints or digital images, you are REQUIRED to charge and remit sales tax.
(If you’re scratching your head and asking yourself, “What does remit mean?”, don’t feel bad. I definitely had to Google it.) Remitting sales tax simply means paying the state what you owe them.
Charging Sales Tax
When it comes to charging sales tax, you have two options:
Charge your clients your rate + sales tax
Include sales tax as part of your rate
For example: I live in New Hanover County, where sales tax is 7%, and my portrait session rates start at $375.
I can choose to invoice my client for $401.25 ($375 + 7% tax) OR I can invoice them for just $375 and pay the $26.25 tax myself.
There’s nothing wrong with either option, as long as you’re collecting and remitting sales tax to the state. If you do decide to include the sales tax in your fee structure, the law requires you to state that plainly in your place of business or on your website.
When to Remit Sales Tax
Now that you know you need to charge and remit sales tax, let’s talk about when you need to remit payment.
Sales taxes must be filed either quarterly or monthly, depending on how much tax liability you expect every month.
According to the North Carolina Department of Revenue site:
“If your tax liability is consistently more than $100 but less than $20,000 per month, you should file a return monthly and pay taxes on or before the 20th day of each month for all taxes due for the preceding calendar month.
If your tax liability is consistently less than $100 per month, you should file a return quarterly and pay taxes due on or before the last day of the month for all taxes due for the preceding calendar quarter.”
Quarterly returns are due on or before the last day of January, April, July, and October for the preceding three-month period.
(And for those of you reading this who expect to owe more than $20,000 in taxes every month, please feel free to send me an email at firstname.lastname@example.org to teach me how you’re making so much money.)
Ready to get your sales tax ID? Visit this page on the NC Department of Revenue website to create an account ID number for sales and use tax.
Depending on where you live in North Carolina, your tax rate will vary. Click here to find the tax rate in your county.
If you have any more questions about sales and use tax, see the Sales and Use Tax FAQ on the NC Department of Revenue website.
Step 5) Apply for Your State Privilege License
While the state of North Carolina does not require a general business license, photographers are still required to pay a $50 state privilege license tax every year. (I called the NC Department of Revenue to confirm this and the representative on the phone chuckled and said “Hey, we don’t make the rules!”)
Here’s how to do it: Click this link and scroll down to the letter “T” to find the application. Once you complete it, bring it to your local department of revenue office. Don’t forget to bring $50 with your application.
Step 6) Check Zoning Restrictions and Permit Requirements
Your city or county may have zoning and permit requirements that restrict or ban specific types of businesses from operating in a certain area.
For example, if you plan on photographing a client in your home studio, your local government might consider you a home-based business and require you to have a Home Occupation Permit.
Check with your city zoning office and ask if they require any permits. You can find their contact information by Googling your city and the word “zoning” together.
Step 7) Protect Yourself with Insurance
There are two types of insurance you need if you want peace of mind for your photography business: equipment insurance and liability insurance.
As a photographer, you have valuable gear that you need to protect from damage and theft. Depending on your equipment insurance coverage, you can replace your equipment at partial or full value.
General liability insurance protects you from those “oh sh*t!” incidents, covering things like bodily injury, property damage, and like libel or slander.
In a perfect world, we would never have to worry about these things. But these things happen, and it’s better to be protected.
Professional Photographers of America (PPA) offers insurance coverage, contract templates, and professional certifications for just under $28 a month. Basic equipment coverage is included with your membership. You can also upgrade your coverage to include general liability insurance.
I’ve been a PPA member for years now and I can’t recommend them enough.
Step 8) Hire a Tax Professional
As photographers, we have enough on our hands with marketing our services, scheduling shoots, sending invoices — the list goes on. When you add accounting to the mix, it’s easy to get overwhelmed.
If you can afford it, consider hiring a bookkeeper or CPA to help manage your business finances. Some bookkeepers offer services like filing your monthly sales tax and annual report for you, saving you a ton of time and effort so you can focus on growing your business.
Keep in mind that you may not want to wait until tax time to hire someone to look at your books. Consulting with a tax professional throughout the year will help you make decisions that give you the biggest tax breaks.
Tips to Find the Right Fit
Ask your friends or colleagues on Facebook or LinkedIn if they have recommendations for bookkeepers and CPAs. You can also Google local tax professionals in your area to compare their rates and services.
Keep these factors in mind when deciding who to hire:
- Do they have experience working with small-business owners?
- What do their services include besides general bookkeeping or preparing your taxes?
- How frequently do they communicate with you, and by what means?
For example, my bookkeeper works primarily with small-business owners, so she’s especially savvy to the tax breaks the little guys should be aware of. She also files my monthly sales tax on my behalf, and I can call or text her anytime I have questions about anything.
(If you’re looking for a bookkeeper, send me an email and I would be happy to refer you to her.)