A&P About the newborn pictures I posted

Discussion in 'Lifestyle' started by Kamekaze v.OT, Mar 19, 2010.

  1. Kamekaze v.OT

    Kamekaze v.OT New Member

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    I know they weren't very well reviewed but the couple I did them for absolutely loved them! They liked them enough to offer me some cash and ask that I get do them eveybody month for a year! My question to otap is how should I go about this? I don't want to be labeled as a dirt bag avoiding taxes and stealing paying gigs from legit pro's but I am no where near ready to set up a buisiness and all that jazz. I could really use the cash though... Would jumping on this now and worrying about it later put a stigma on my reputation when I do decide to be legit and file for a tax id or should I stop thinking so much and just accept good fortune?
     
  2. nine

    nine OT Supporter

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    why would you need a tax id?
     
  3. Kamekaze v.OT

    Kamekaze v.OT New Member

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    I am selling a product for a profit, I may be mistaken but I believe legally I am supposed to pay taxes on it. Please learn me if there are other ways of doing this!
     
  4. jared_IRL

    jared_IRL OT Supporter

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    There is something called 'hobby money', which is what I believe a lot of us (me included) work under.

    It's where you do make money off of your hobby, but it's not a full time business, nor is it how you make your primary living.

    You do NOT need a tax ID number, nor do you need to claim the profits made from your 'hobby'.

    All this is directly from my accountant, and was his response when I asked about turning my photography into a legit business.

    So don't sweat it. Go shoot. Have fun.

    Oh, and congrats! :)
     
  5. Idyfohu

    Idyfohu New Member

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    Awesome! And what ultimately matters isn't what us sitting here behind our computers say, it's the clients opinion that matters most. Congrats! You'll only get better and better with each shoot and monthly, well that's awesome!
     
  6. jshively

    jshively OT Supporter

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    :werd:

    I would not worry about it until you are making a profit or it is a full time gig.
     
  7. johan

    johan Active Member

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    Of course they loved them, it's their kid!
    You could sketch a reasonable likeness on a dinner napkin, and I bet the mom would clutch that thing next to her heart for days.



    About the money: I doubt they are paying you thousands to do this, ya?
    And this isn't really a high-dollar paying gig that a working pro would be bidding on/making a living on.

    So don't worry, you're not stealing any work from a pro, and the IRS doesn't care about it either.

    ENJOY :)
     
  8. Jcolman

    Jcolman OT Supporter

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    Did your accountant say how much money you could earn as a "hobby" before you have to pay taxes? I just had to send the IRS a check for $9k on the little bit I made last year. :squint:

    Then again, I did get to write off all my gears.
     
  9. jared_IRL

    jared_IRL OT Supporter

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    part of it being a hobby is that you can't write off anything... so yer prolly beat...

    In a lot of cases, it's actually harder to prove that you are actually a legit business than it is to prove that it's just a hobby, because the gov't doesn't want everyone writing off the stuff they buy for hobbies...
     
  10. adamlewis88

    adamlewis88 New Member

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    You are correct that you dont need a tax ID number. Your SSN can be used instead.
    You DO have to claim all increases in wealth though. If they are paying him with any type of asset in exchange for his services, he is realizing an increase in wealth and the fair market value of the assets received must be reported as part of total income. Technically, if you pick money up off the street that you keep, that is supposed to be reported as well.

    Now that is the strict legality of it.

    Realistically, as Im sure your accountant is thinking, youre not making enough for it to matter and, for sake of administrative convenience, you dont really need to report it.


    It is no longer a 'hobby' when it is reasonably apparent that you are trying to generate a profit from the activity.

    Negative. You might want to talk to your accountant again. You can deduct hobby expenses only up to the amount of income generated from your hobby (Of course this requires you actually report Hobby income. Careful tax planning will let you know which way is the most advantageous. If you report hobby income only to claim a small amount of hobby expenses, it might be a bad thing to do especially if reporting the income moves you into a higher marginal tax bracket). This deduction would be a miscellaneous itemized deduction (read: one you CANNOT take IF you take the standard deduction) and would be subject to a hurdle of 2% of your AGI.

    As an example:
    Your AGI for the year is $50,000
    You made $2,000 from your hobby
    You spent $7,000 in equipment
    You may choose to take a miscellaneous itemized deduction which would lower your AGI by $1,000 ($2,000 of expense * .02($50,000))

    As another example
    Your AGI for the year is $50,000
    You made no money from your hobby
    You spent $7,000 in equipment
    Since you never realized any income from your hobby, you are not allowed to deduct any expenses

    Im studying for the CPA exam and plan to go into tax law.
     
  11. Kamekaze v.OT

    Kamekaze v.OT New Member

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    Awesome info here, thanks gays.
     
  12. wizeguy4

    wizeguy4 New Member

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    I am intrested in knowing how you were able to get an account with KISS books without being a business with a tax ID?
     
  13. AbortionSurvivor

    AbortionSurvivor Active Member

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    You even consider paying taxes on this just decreased your street cred.
    Take the money.
     
  14. BeachBoy

    BeachBoy New Member

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    in canada, you don'T need to charge taxes nor pay taxes (sales tax) if you don'T sell for more than $30k per year.

    but you do need to declare the profits and pay income taxes on them, even if you only sell $1000 worth of stuff/services!
     

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