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Get Set Up Legally Review

so being set up legally, and this one wildly varies because we do have people in the mentorship program from all over the world. So I'm an LLC. I am an LLC because I talk to my attorney and I talked to my accountants about it and we talked about the amount of money I bring in every single year. And we talked about the type of business that I run, and we made that decision together. Um, it's not what you are is that you did it in the first place. So everyone who wrote in their homework assignment I have decided to be a whatever the goal of the homework assignment was not for me to say. Well, you've decided to be an LLC. Tell me about that. It's that you have met with the appropriate professionals and that you have actually done it. That's the point of the homework assignment. Right now. I'm a sole proprietor, and the only reason is because it's nearly $1000 to be set up. It's an LLC here in California. Every year we also have to pay an additional $800 fee, and it's the only reason I'm n...

ot an LLC, though I really need to become an LLC. How would you handle this? I'm not in California, right? I don't have that extra amount to look at. But when I was trying to decide about being an LLC versus a sole proprietor I'm or an S Corp in New York is we looked at how much it would cost to file my taxes every single year. We looked at the what you would need to pay for a, B, C and D versus my income versus taxes paid. And that's how we made that decision. I would handle this by sitting back down with your tax professional and saying, Listen, I want to be an LLC. Let's run the numbers on all of the options. Let's run how much tax I would be paying on all of these different options and then Onley your tax professional in California can guide you toe what you should dio got another one moving to California with your $ a year to be an LLC, I think that I'll continue to remain a soul prop with my liability and errors and omissions insurance for the next few months. Once I see that I could easily be sending $800 a year all convert to an LLC, and that's a great way to look at it as long as you are consulting your tax professional before making these decisions. We are a full proprietor but will likely be changing to An S Corp in the next year. Soul prop is easiest to set up, and since we had fewer assets and mostly dealt with friends, it was most reasonable. Now we're in our own home and on a much larger client base or having more protection. There is crucial we were looking at an LLC, but it appears that an escort has some additional advantages for Virginia, and this is great. And what this means by this answer right here is that they're doing their research. They're looking at what it means for their state in their countries, specifically, and hopefully you're going to talk to someone to help you make that final decision. And I'm not trying to tell you guys that I'm not willing to help you decide what to be. Legally, I'm just telling you that I'm a photographer and I have no licensing new accreditations and absolutely no. No ability to tell you what to do legally. Which is why what I can do. And you know the best that I could do for you is tell you when you need to consult an actual professional and making a decision like this. It's something that you need an actual professional for and not a professional photographer, not a friend, not somebody who dabbles in this. You need an actual pro. So, Carlos, I would jump on the escort. Currently on Set up is a soul prop. I don't shoot many weddings. I've already I've always felt that choosing An S Corp over in L. C was a bit too much for me. I joined this class to learn where my failings were, and I just realized that being set up as an LLC or An S Corp is a way of protecting my family. I have a full time job and I have no intention of leaving it with That said, I believe that the L. C will charge me Social Security and Medicare taxes, which are already paying with my 9 to 5. And that's why I would jump on the S Corp. I still have to meet with a C p. A. What this is showing is that Carlos is doing his homework. He's doing reading. He's understanding what's happening. I would highly recommend you familiarize yourself with these things as much as you possibly can before meeting with your C p A. That way, everything that they're telling you is not, you know, business setting up 101 You have at least a decent knowledge base before going in there. But you have to bring in your numbers. You have to bring in the type of business that you're running and be very honest with the talks professional that you meet with and whether you meet with an attorney or a c p a. R both like I did. This is one that I will not help you with. I won't tell you what to do, and I won't. It would be very irresponsible irresponsible of me to do that. And if you were in another country, it would be utterly irresponsible for me to tell you what to do, because I don't know. I know enough to tell you that it is crucially important to make these decisions and to seek out the advice of a professional that is actually out there to help you make these decisions and along the same lines, collecting sales tax. And again, this is a US saying every other country varies. So if this is not applicable to be you, that is fine. I do this yearly, I pay myself tax yearly. That's how the state of New York has set me up to do it, and I check in every single year. I make sure that I'm paying correctly. I make sure that none of the laws and rules have changed. I make sure that the delivery of digital downloads hasn't changed. I do the reading myself, and I also ask my accountant, Hey, is there anything new going on this year with sales tax that I should know about? So a few questions that did come in about that I've been collecting sales tax and currently charged tax on all of my wedding packages that involve an album or any other physical product. While I could itemize the items of my packages, I felt like it was easier that way, and I want to make sure that I cover myself completely. The part that I want to talk about here is, while I could probably try to itemize the items in my packages, you need to talk to your C P. A. Or whoever is helping make these legal decisions for you about this, because I know that in the state of New York you can't break it out like that. If it's part of a package like if I have a package that includes time and an album and it is, it'll download the second I put it in a package. I have to tax the whole thing. I legally cannot break it out and Onley charge sales tax on the physical part of it. It has to go with a group, So if you're thinking, I'll just break it out and all itemize it, so I only have to collect sales tax on one thing. You need to make sure that you either can or cannot do that legally. That's it's a really important thing. Another question. My vendor's license is secured the correct way to apply for an Ohio business licenses to go through the Ohio business gateway and apply online. Most vendors need to pay a $25 fee to obtain their license, but this application is very straightforward. I fall into the semi annual bracket, with payments due in January 23rd and July 23rd. In addition, I set up a separate no interest savings account into which I deposit all sales tax collected. In order to keep it away from income, I Will it be able to pay collected tax online through an A C H transaction directly from this account? This is brilliant. This is a brilliant idea. Um, for those of you who have trouble keeping your tax money separate, both collected sales tax and income tax, which we'll talk about in a bit, It's a pretty good idea to have a completely different account that you take that sales tax and you put it into so that you know that when it's do you literally just collected it and held it, and then you pull it out and pay it. Amanda, that is brilliant. My account is helping me set this up. I didn't have a number, nor could I figure out how to get one. So he's graciously helping me out. It's hard to believe, but I used to be smart now this stuff despise right over my head. I hate this stuff, right? Like I hate the itty bitty little accounting nuances, but that's why you have someone to help you set it up. So if you feel like you know, this is all over my head, this is really frustrating. This is really irritating. I can't figure this out. Don't worry about it. That's why you have a person out there. That's why you have an accountant to help you. In Ohio, we don't have to file or charge sales tax for digitally delivered items, so we only have to charge for tangible items. So unless we actually hand over a CD DVD, USB, then we don't have to collect and pay sales tax. That's how it is in New York, too. And that's how it is in a lot of places. But this is one of those things that I highly suggest that you check on yearly because at some point in time the whole digital download thing is going to become so prevalent that they're going to start taxing it, and you need to not miss out when and if they inevitably do that. All right, I already have a sales tax permit. I charge talks on every session and wedding unless they are not receiving any tangible item. I take note if they had or had not paid sales tax, and if they hadn't then later place an order for print thumb drive, etcetera and they are aware of paying tax on the entire amount. Yep. Um, sales taxes immediately removed from my account into a sales tax account so that when I file quarterly, I just write a check from that account. This is the way it is in New York as well. If somebody, it's kind of go with me here. If someone buys a shooting burn package right and they don't receive an actual tangible physical product and then they come back later and they add an album onto that package, I have to go back and tax the whole thing as it is, One big hole package. So just be very cognizant of the fact that this is something this is a situation that you should run by your accountant and see what the law in your state is about this. All right. We've already been collecting sales tax and paying it monthly online in Virginia. There's quite the uproar about whether we are to charge sales tax on services or only goods. The law was written for film, and now that we're in the digital age, no one really seems to know the answer. One c p. A. Will say to charge tax on prints and physical items sold. And another will say to charge tax on everything because the end result is a flash drive, a physical product. It's a very scary thing because that's a lot of money to charge or not charge. Calling the state tax people yield the same results. If I have anything in my collection that I think could possibly be tax, I just tax the whole thing and the part that I want to talk about. And this is the line where it says it's a very scary thing because that's a lot of money to charge or not charge. You're not charging the client this This is not income for you. You are collecting money for the state and anywhere that your clients are gonna go and buy something. They're going to, you know, pay sales tax on it. It shouldn't be any different with what you're doing for them now. You know you can if they say Wow, this is a lot of money for sales tax. You say, Well, you know, it's not. It's not coming to me. It's going to the state and I legally have to do this as a business. And this is one thing I'm not gonna be flexible on. I'm not giving you a discount because you use sales taxes too high. I'm not giving you a break. I'm not, you know, telling you to pay. I'm not taking your cash and not recording it right. Like I'm a real stickler on sales tax because it's not worth bending. The rules are being under the table to get a booking on Lee to then end up paying a ton of money in an audit later. It's just not worth it. All tangible items that I sell to my client are subject to sales tax. Same here. It's very smart that you know this. Oh God, we've got a Floridian. I had to tell you guys the eight years that I sent as a business in Florida, where some of the most incredibly frustrating years ever. No one knew what was going on. No one knew what the rules were. At any point in time, I had my business door padlocked one day because they said that I had not paid sales tax in 18 months. When I had, they just been applying it to a different business. It was a never ending nightmare. So Kimberly are I feel for you. This has been a hot topic here in Florida, since the state of Florida has given multiple photographers different information over the years they have. They've been doing that since 2002. I received clarification from the state earlier this year to ensure I was collecting correctly. Turns out I wasn't, but I was still following the instructions I was given. Not sure when they change things or if I was given the wrong information. But I'm currently still corresponding with the state to ensure I'm doing everything correctly, and that's smart. If you feel like you're getting conflict ing information, get it in writing. So if anything ever does happen, you can point back and be like this employee of the state gave me this information and writing and I have been following it ever since. So you're not just making up what you're doing. You're following the instructions that you were given any questions about sales tax way do is take a break from the mind numbing depression of sales. Perfect. I'm going to step back a little bit and we're gonna talk. Teoh thb Who got a little clarification? Alright, A little background. I own an event. I own an event coordinator business and employ a coordinator. I am now just a wedding photographer since 2010. I'm wanting to see if I should combine both companies or keep them as separate. I would keep them a separate. I think it would be very confusing. I think that clients listen no matter how much you inform people about how you do what you do and how things are, people don't read, people don't listen. People don't pay attention. People forget. And the last thing I would want for you would be a photographer to show up and have them think that they were there to help coordinate also or oh, well, you do coordination. Can't you just help me out with that? Oh, well, you do photography. Can't you just help me out with that. I think that they're so different that the smartest thing that you could possibly do is to make sure they never touch each other. Okay, Perfect. And then we got one more. Here, please. Thistles from Michelle. I'm currently shooting under 20 weddings a year with plan for growth. One accountant that I met with suggested that I get up, set up a ah Seoul prop using my business until my business grows. Another counting says I should do in. L see, How do you know who to choose for your C p. A. I mean, that's hard. And this is one of those things that I can't like unless I was with you and I met with them and I listen to them, talk to you and got a gut reaction there. There's there's merit to both ways of going about doing it. It doesn't mean that one of them is right and one of them is wrong. They're both right in different ways. I opted for the LLC in Florida. I was an escort because I had an employee and that was the smartest thing to do. Then, in there with an employee here I am an LLC, because it is the smartest thing for me, like my And I'm not going on saying, Mr Bragan, none of this is about bragging. My income level is too high to be assault prop. It would just be really not smart. And as I've been kind of accumulating assets, I don't want anyone to take them away from me. So I went with the LLC route. Um, I think that if you are making a substantial enough income and it could be $10,000 a year could be $50, a year. I like the additional protection of the LLC. I would go back to each accountant and have them talk to you about what tax time would look like if you went with each of them. You know what your taxes be higher, like my l l C means that my taxes are higher, But the price that I pay every single year to have my taxes done is less so, it even out you need to find out what the numbers would be for you. What the protection would be for each and then make. You got to make the decision that your gut tells you to make. The one thing that I will say is if you ought to be an LoC or if you ought to be a corporation, you have to be crucially, crucially careful about piercing the corporate veil financially and not using your business funds for personal things. Because the second you do that, you start losing the protection. Because if you're an LLC to keep your business and your personal separate and you're not keeping your business and personal separate, then it starts kind of knowing and voiding that protection. So just be really careful. Business Credit card for business things only. Business account for business things only. You know, every once in a while, accidentally pull out the wrong credit card. When I'm on Zappos or something like that, I'll make a mistake. And then we noted as a draw, and a little of that is OK, but you don't want your funds to start commingling a lot the way you could if you were a sole proprietor. Okay, cool. So I would I would follow up, meet with both of them and just say, Tell me more about why, and there's nothing wrong with going back to the soul prop C p. A. And saying, Listen, I'm not with somebody else. I got a second opinion. They said I should be an LLC. Tell me more about why you think I shouldn't do that. I just acquire more information. Perfect. And Victoria Sprung would like to know Who do you use for a credit card processing for taking credit card payments from my client? I use a company called Rocky Mountain Credit. I don't I actually don't even think they're called Rocky Mountain Credit anymore. The Hartford they're called the heart for now, Um, I signed up with them because they had the best, the most competitive rates for credit cards that were not present at the time of the transaction because I don't have a credit card machine that people swipe. They gave me a very competitive rates for that, which was great. Um, any credit card payments that I take you shoot que are processed with authorized dot net