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I'm a photographer in the county of Los Angeles in

I'm a photographer in the...
I'm a photographer in the county of Los Angeles in California.I'm creating my LLC online (incfile.com). The online form has a question "Type of Business/Purpose". A lawyer who is also a photographer wrote on his blog to answer this with "To Earn Money." I read it here under step 2: https://improvephotography.com/35114/how-to-set-up-a-photography-business-legally/His reason to answer this way is as stated: "The reason is that if you're ever sued, you want it to be crystal clear that you don't ONLY do portraits, for example. If you write something too narrow, the plaintiff may argue that your business is just a pass-through account and that you were engaging in other business endeavors. If the purpose of the company is simply “To earn money” then you can do whatever you want with the company."1) Does this sound right? Am I able to say "To earn money" on this line? Or should I just answer it in full and say that I'm a photographer, videographer, and educator of both mediums.2) My wife is also my partner. Does it make paperwork and filing taxes more complicated if we're both listed as members (co-owners) or should we just choose one person as the owner if we want simplify tax filings at the end of the year? By the way, which ever way we go we plan on LLC electing as S-Corp later.3) The way I understand LLC electing as S-Corp, I will need to pay myself a salary to separate the business finances and my personal finances. I'm pretty new and most weeks we don't have any photo shoots. And when we do, it's for a paltry amount like $300. I read somewhere that it's best that we need to pay ourselves a regular weekly salary. Currently as a sole proprietor, if I make $300 it goes straight to our bills at home. How do we document salary if we only have a few photo shoots a year?4) I read that the LLC pays the franchise tax board $800 annually and a fee. So my tax liability to the state will be $800 plus whatever I pay myself as a member (owner), correct?5) If I create 2 DBA's under the LLC, does that mean that I have to pay the $800 twice?6) Our photography business is home based and I live in Monrovia, California. This is in the county of Los Angeles. But I'd like my mailing address to be in the city of Los Angeles, California just because the optics of that would be better than the city of Monrovia. If I'm operating in Monrovia, CA but I rent a mailbox in the city of Los Angeles for payments/checks to be mailed to, do I get a business license in the city of Los Angeles or city of Monrovia?Regarding charging sales tax as a photographer1) If I shoot a wedding, headshots, or real estate photos and I deliver my images only via digital transfer/download such as dropbox. Do I need to charge sales tax? I'm asking this because I read that the only time I need to charge sales tax is if I deliver images on flash drive, hard drive, prints, albums, or other physical item. Let me know if I'm incorrect.2) Can you tell me if I need to charge sales tax in this instance: I shoot a wedding and deliver the images via digital download. A month, or even a year, goes by and now the couple has asked me to create a wedding album for them. Assuming that a sales tax must be charged, do I charge the sales tax on just the wedding album or do I have to charge for the entire wedding as well since it's connected to that transaction?3) For any sales tax I must charge, is it for federal, state, local, or all three?
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5/16/2017
Law Educator, Esq.
Category: Business Law
Satisfied Customers: 125,930
Experience: All corporate law, including non-profits and charitable fraternal organizations.
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Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
1) First off that answer is way too simplistic. The answer is typically, "To engage in providing photography and videography services and to conduct any and all other business lawfully allowed within the state of California."
2) It only makes things complicated to have your spouse as a member of the LLC in the event of divorce. IF you do not make her a member, then she could be an employee and take salary for working (since a member of an LLC does not get to be an employee, they take profits or dividends from the LLC). That is a personal choice you need to make. No matter which way you choose to go, you should select "Manager managed" for your LLC, even if you will manage it yourself as a member, since if it grows larger you can put in a third party manager without modifying the documents and a manager managed LLC can still be managed by a member who is the manager.
3) If you select to be a corporation, you can pay yourselves as members a salary. Sometimes, it is better for tax purposes to show you receive only a dividend or a share of profits, since there can be more tax write offs, but that is something you have to sit with a local CPA to discuss.
4) Yes, there is a minimum franchise tax in CA no matter what you make and that is the minimum you have to pay. If you make more then you have to pay taxes on what you make.
5) DBA is a fictitious business name that your LLC operates under, they do not pay separate taxes it all goes under the LLC.
6) If you are operating in Morovia, you can have a mailing address anywhere you like, including LA. You would still register your physical business location as Morovia.
7) This is the nuts and bolts of sales taxes for photographers, essentially what you read is correct, here is what is taxable and what is not for sales taxes: http://www.boe.ca.gov/pdf/pub68.pdf
8) The issues of what you need to charge sales tax on are in the publication I provided (copy and paste the link to your browser, do not just click on it). For example, if you electronically deliver photos, that is not subject to sales tax.
9) It is only state and local sales tax, there is no federal sales tax.
Please do not forget to leave positive feedback by clicking on the 5 stars at the top of your page , as the experts are not employees of the site and get no credit for spending time with customers unless they leave positive feedback. Thank you.
Law Educator, Esq.
Category: Business Law
Satisfied Customers: 125,930
Experience: All corporate law, including non-profits and charitable fraternal organizations.
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Customer reply replied 1 year ago
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