What to do when a hobby...

AfterImage

... starts making money?

Hey there folks, I need some advice.

A life long friend and I suddenly are finding ourselves in a position where our hobby of photography has starting to make money.

Cliff Notes on the background:
We started off taking pictures at local and state parks and donating the images back so they could use them on their websites and handouts. No money, just a little good karma and exercise.

However, we are now talking with a park about putting together a few prints and putting them up for sale in the gift shop (and maybe even an online gallery here at SmugMug :thumb ).

Soooo... here is the quandry. We are going to be concidered a business if we do this, right? We'll need a Tax Id and all that other wonderful stuff?
My scant understanding is that if we make $600+ it must be reported to the IRS for tax purposes.

To make this even more fun and complex, since there will be 2 of us I assume we'll have to setup as some sort of partnership?
I'd be shocked if we made more the "beer money" on this but I want all the ducks to be in a row just in case... the tax man is heartless and he knows where I live :rofl


Uggggh.... maybe I need to post this over on a Small Business forum :

Cygnus Studios

Don't you just hate it when people want to pay you.

In all seriousness an accountant will be a great place to start. You will also have some liabilty issues that come with the business end.

JohnBiggs

Personally if I make a few bucks at a hobby, I wont run out and open a business. I'd wait until I was making enough money to support a proper business. Such as the fees to pay an accountant once a year, the fees to establish the business, the tax fees the state charges, etc.