Tax Reporting

CRPPhotography

What taxes does a photographer have to put on their sales tax form and their 1040 and schedule C or are all of the income and sales taxes covered by SmugMug. I don't quite understand this. I.e. if i sell $100, smugmug takes 15% of my profits and the cost, do i still report 6% sales tax for the 100 and 15% withholding income taxes for the $100 on my schedule c, b/c if so, this doesnt seem like that great of a deal b/c they take 15% of profits, 6 bucks is gone for sales tax, $15 is gone for income tax, and then a portion of that is gone for costs, after its all said in done, theres probably only $10 of that original $100 left in profit. But maybe sales and income taxes dont have to be reported with this program? i'm not sure
Thanks!
Cody

Gregg Hall

CRPPhotography wrote:

What taxes does a photographer have to put on their sales tax form and their 1040 and schedule C or are all of the income and sales taxes covered by SmugMug. I don't quite understand this. I.e. if i sell $100, smugmug takes 15% of my profits and the cost, do i still report 6% sales tax for the 100 and 15% withholding income taxes for the $100 on my schedule c, b/c if so, this doesnt seem like that great of a deal b/c they take 15% of profits, 6 bucks is gone for sales tax, $15 is gone for income tax, and then a portion of that is gone for costs, after its all said in done, theres probably only $10 of that original $100 left in profit. But maybe sales and income taxes dont have to be reported with this program? i'm not sure
Thanks!
Cody

First off, I am not a tax attorney, so take what I say with a grain of salt.

The way that I plan on reporting my income is the 1099 sent to me is my income, and that income is from the service of taking the picture. Smugmug has handled the sale of the the actual picture, which would be the taxible item, so I don't have to worry about sales tax. The portion that smugmug keeps, the 15% is my payment of their service to handle the selling of the product, and if it is deducted from the 1099 I don't have to worry about it, if it is included see below about deduction of my costs.

From that 1099 I can then deduct the costs of doing business, such as the cost of my smugmug site, and equipment required to produce the picture.

Shan_50

Gregg Hall wrote:

First off, I am not a tax attorney, so take what I say with a grain of salt.

The way that I plan on reporting my income is the 1099 sent to me is my income, and that income is from the service of taking the picture. Smugmug has handled the sale of the the actual picture, which would be the taxible item, so I don't have to worry about sales tax. The portion that smugmug keeps, the 15% is my payment of their service to handle the selling of the product, and if it is deducted from the 1099 I don't have to worry about it, if it is included see below about deduction of my costs.

From that 1099 I can then deduct the costs of doing business, such as the cost of my smugmug site, and equipment required to produce the picture.

Does anyone else have anything on this issue?

Angelo

If your sales are being handled by Smugmug you have zero liabilities relative to sales tax. Smugmug is the retailer and responsible for the collection and distribution of sales tax when appropriate.

sealedglass

Cody,

This may not be the answer you're looking for, but my recommendation is to hire a CPA. There are just so many issues (that change annually to boot) to deal with, IMO, it's worth the money to make sure everything is done correctly. Just like photography, anyone can do their own taxes, but sometimes the pros are worth the cost to get the best result.