For Photographers

I Do Declare

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This shouldn’t come as a surprise but, when you do your annual income tax, you have to declare all your business income. It doesn’t matter whether customers pay by cash, cheque or credit card. You have to report all of it.

Business income from customers in other countries must also be declared on your Canadian income tax.

Canada Revenue Agency (CRA) recently sent a federal court order to payment processor Square Canada to turn over information on its Canadian sellers who annually processed at least $20,000 in the past five years. The Globe and Mail reported that this is “part of an ongoing effort by the CRA to crack down on tax avoiders.”

This has been happening for many years in the US with Square, PayPal, and all other third-party electronic payment processors. Every electronic payment processor in the US has to report to the Internal Revenue Service anyone whose payment volume annually exceeds $20,000 and 200 transactions.

The CRA is concerned about self-employed people and those who get paid in cash.

Always keep proper invoices, receipts, and bank statements to prove your income and expenses.

 

A Taxing Situation

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It’s tax time and many folks are at least thinking about doing their income tax. Professional photographers might want to refresh their knowledge of allowable business expenses.

This list of business expenses should provide a starting point for completing tax form T2125.

This is only a starting point because “you can deduct any reasonable current expense you paid or will have to pay to earn business income.”

“Reasonable” is not defined in (tax) law but it has been shaped through Canada Revenue Agency rulings and technical interpretations. If your tax situation is even slightly complex, a good accountant can come in handy.

 

Life in the Slow Lane

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Most photographers go through a slow period, or two, during the year. Perhaps it’s the time from Christmas to the end of January or maybe it’s during a summer month. It depends on what type of photography you do. So what should a photographer do during a slow period?

What not to do

• Don’t panic (too much).

• Don’t use a slow period to catch up on your TV viewing.

• Don’t buy new gear. Don’t fool yourself into thinking that if you buy a new camera or lens, you’ll get more business. New gear won’t help.

• Don’t have a fire sale. Unlike a retail store, photographers don’t have marked-up merchandise on their store shelves that can be discounted. You have only time on your “store shelf” and, unlike a tangible product, time can’t be restocked.

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Violins and Marketing Photography

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When you play a violin piece, you are a storyteller, and you’re telling a story.

– Joshua Bell

You can replace the violin in that statement with a camera and it would still hold true.

A decade ago, The Washington Post did an unscientific social experiment where Joshua Bell, a well-known classical violinist, dressed in jeans, t-shirt and ball cap, performed incognito in a subway station. The newspaper wanted to see how many morning rush-hour commuters would stop to hear classical music being perfectly played.

On the morning of Friday January 12, 2007, Bell set up inside a Washington DC subway station and placed an open violin case on the ground for donations. The unannounced event was recorded by a hidden camera.

The Post was worried about huge mobs gathering and the possibility of needing police for crowd control. You can probably guess what happened.
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Point me in the wrong direction

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Thinking of starting a photography business?

Your first photography web site and your first business plan will fail. Guaranteed. You will have to make changes and try again. Then more failure and more changes, and more failure and more changes.

If you’re not prepared to be wrong, you won’t get anywhere important. And you won’t know if you’ve arrived anywhere important until you know where’s not important.

You must have a good answer to each of these questions or else you’re in the wrong place:

1) What problem will your business solve?

If your answer is that people want photography then you’re wrong.

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Worth Every Cent

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When someone asks you to work for free, they want photography that’s good enough, pictures that are better than nothing, photos that are worth what they’re paying.

When someone hires you to work for pay, they want photography that’s good, pictures that are better than anything, photos that are worth what they’re paying.

 

 

 

Pre-invoices and Prepayments

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If you need a deposit or a prepayment before the photography takes place, you simply ask the customer for it. Easy, right?

With retail customers, this is a straightforward process. But with some corporate customers, it might require slightly more paperwork.

Some companies can’t, or won’t, issue a prepayment based only on a photographer’s estimate or quote. They may need an invoice. An invoice is a legal request for payment, a quote is not.

How do you invoice a customer for work that hasn’t been done?
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