With tax season nottoo far away, now is absolutely thebest time for you to obtain all of your necessary legal documents.
The longer you fail to abide by certain legal stipulations, the more time you have spent running an illegal freelance business.Sure, failing to pay taxes on money earned for a few shoots won't immediately attract the attention of the IRS,but continuing to run your business without submitting the required forms will eventually lead to legal problems. And speaking of legal problems, there are non-tax related forms (such as letter of agreements and photo releases) you will need, too.
As a freelance photographer, you may find the words "taxes" and "legal" painful to hear. But the process of acquiring, completing, and submitting the necessary forms is simpler than you think—and mastering the basics will allow you to increase the professionalism and security of your freelance photographybusiness.Follow thedirections below, and you'll have distinguished yourself from many freelancers working today. Unlike them, you'll be official.
Tax-Related Legal Documents for Freelance Photographers
Form SS-4: Produces an Identification Numberfor Your Freelance Photography Business
While you are not required to have an Employer Identification Number (EIN) as a freelance photographer, getting an EIN is free and easy. If you don't have an EIN, you'll use your Social Security Number (SSN) in its place on W-9 forms and other tax documents. Here are some reasons you may want to apply for an EIN:
· You're thinking of hiring someone to assist you. You must have an EINto hire an employee, orto pay someone for services completed on behalf of your business. This includes having someone help you with a shoot or taking pictures in your stead while you're away on vacation.
· You want to keep your SSN "for yourself." If you don't have an EIN, you have to use your SSN in its place—the idea of which makes some people uncomfortable. An EIN is a good idea if you want to ensure the security of your SSN or to keep separate your personal and business lives.
· You want to legitimize your business—for free.Since an EIN is used as a tax identification number for businesses only, having an EIN is a sign that you are running a serious photography business and you are not just another amateur with a camera. This makes you feel good and gets you more respect from your clients.
The vast majority of people who apply for an EIN get it. As long as you don't have any federal offenses on your record, you're good to go. All you have to do is fill out an SS-4 form, mail it in, and wait about a month to receive your official document.
Form W-9: For Long-Term Clients and Photo Shoots that Pay Over $600
As required by law, an individual or a company that pays you $600 or more a year must complete a 1099 form and submit it to you and the IRS.The form states how much you were paid, and helps you and the IRS to determine how much you owe in taxes.
To fill out the 1099 form properly, your client must receive certain information about you, which should be easily found on your W-9 form (i.e., name, address, SSN or EIN).Once you submit the W-9 to your client, the individual or company will keep it for bookkeeping purposes.
If you know you're going to be making $600 or more with a specific client, show some extra professionalism by providingaW9 formbefore it’s even requested. Not only will this wow your client, but you will alsobe better equipped to keep your taxes in order. By submitting a W-9, you'll ensure that you receive a1099 to help you complete your quarterly or year-end taxes.
Schedule C-EZ: The 1040-Like Form for Most Freelance Photographers
The "EZ" in the Schedule C-EZ stands for "easy."Unlike other professionals and companies, as a freelance photographer, you can file yourtax returnsin the easiest, most convenient way possible. On the Schedule C-EZ, the IRS spells out the entire procedure and even tells you at the top whether the form is appropriate for you.
You're eligible to use the Schedule C-EZ if you:
· Have business expenses of $5,000 or less during the year.
· Only sell services (photo-taking) and do not hold an inventory.
· Work by yourself and do not hire any employees.
You can view the entire list of stipulations on the form itself.
For those unfamiliar with the Schedule C-EZ: think of it as a freelance business's equivalent of a 1040, the form you fill out as an employee at the end of the year. As a freelance photographer, you complete the Schedule C-EZ instead of the 1040because your work wasnot completed as an employee, but rather as an independent contractor.
Non-Tax-Related Legal Documents for Freelance Photographers
Letter of Agreement: Use as a Legally Binding Printed Contract
If you've been taking photos asa freelance business for a while, you will probably appreciate this type of letter. A letter of agreement is a contract that spells out the services, payment, and people involved. It protects you, the freelancer, as well as the clients you shoot for. It keeps everyone honest and makes sure that no one ends up losing out in the end.
Why a letter of agreement? The truth is, contracts sometime go sour. This is an often unseen and unpreventable part of the business. To make sure you're not wasting time with a client who decides to argue over details at the end of a contract, draft up a letter of agreement beforehand.
Here are some ways in which a letter of agreement can help you:
· Guarantees you payment as long as you provide the services agreed upon.
· Allows you to keep a well-documented history of services provided for all of your clients.
· Makes you appear more professional than the majority of freelance photographers.
· Helps you to meet deadlines because they're written on a legally binding document.
Here are some ways in which a letter of agreement can help your client:
· Guarantees the clientreceives the services (photo shoot) and materials (photos) agreed upon.
· Makes planning easier,since the individual/company knows to receive your service or material by a specific date.
If your clientsare hesitant to sign a letter of agreement, tell them that you're creating it for them—which is true. One thing that's great for both you and your client is the letter of agreement holds up in court and protects the honest party.Needing a letter of agreement for court purposes may be rare, but it's yet another good reason to create one for every photography project you pursue.
Photo Release Form: For the People and Properties You Photograph
You need a photo-release form before you publish or print photos of anything that doesn't directly belong to you or your client: people on the street,or privately-owned land andbuildings.Most of the time, you need hand-written permission to publish or print pictures that feature any of these.
The process is not as difficult and time-consuming as it sounds. If people are willing to get in front of your camera, they're almost always willing to sign a release that protects you and your client.
From this point forward, start looking at the photo-release form as a necessary part of your business, and not as a hassle. This will keep your business respectable and out of legal trouble.
You can view and download different types of photo release forms online – all for free. These forms include a general release, a release for minor children, a property release, and a building photography release.
Print ten of each of these release forms. Stashthem in your photography bag and make sure you always have a few with youbefore every shoot.Keep them handy, along with the other forms mentioned in this article to ensure your photography business is on the right legal track.