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Thread: Freelance Video Producer Needs Tax Info Help

  1. #1

    Question Freelance Video Producer Needs Tax Info Help

    Hello,

    I am a solopreneur, starting a video production company in NY. It's currently registered as a DBA
    until I can afford an LLC. I also have a part time job on the side.

    As a producer, I intend to land the clients myself and then contract out a videographer to shoot/edit the
    videos I direct for small business owners.

    I have been doing research on taxes but it gets a little overwhelming to me sometimes. Since this work
    consists of providing a consultation and selling digital video, I will not have to collect sales tax in NYS.
    However, I am still confused when it comes to the types of federal forms I am responsible to fill out and
    file for tax purposes, as well as how often I am required to pay business taxes to the IRS.

    When a client pays me, am I supposed to receive a form from them to fill out called a 1099?
    I also would like to know what forms (if any) would I have to fill out when I pay my freelancer.

    I read somewhere, that if I don't want to put my SS # on the 1099 form I get from clients, I should
    consider getting an EIN even though I am not required to.

    Would really appreciate someone to help give me greater clarity. Thanks!
    Video Producer & Strategist

  2. #2
    Mr. Tax Man
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    You should obtain an EIN for your DBA by visiting IRS.gov and completing their SS-4 application online. You can get an EIN in just a few minutes and it will help provide some separation between you and the business.

    Your business will need to file Schedule C when you file your individual tax return. There you'll report your income and expenses. Certain things you buy such as camera lenses or cameras will end up being capitalized and be depreciated over their useful life (usually 5 years). There are elections that can be made to expense it all up-front.

    Your customers won't 1099 you; however, you may be requested to provide your tax ID to others via a Form W-9. You do need to complete that form and provide the EIN you obtained above. Also, for the videographer you plan to sub-contract out, you'll need him/her to provide you a Form W-9. In general, it's good to request W-9's from anyone that you're paying funds, especially if more than $600 in a year for any contracted services. You will need to 1099 them the next year.

    You state there is no sales tax requirement on the photography services, which may or may not be true as I'm not familiar with NYS sales tax laws. The services are taxable in other jurisdictions such as Massachusetts and Connecticut, so you may wish to affiliate with other networks of similar professionals so you understand what may be pertinent to you and your industry. A local CPA may also be of great assistance, though they'll only advise you in areas where you ask questions. Commonly CPA's don't advise on sales tax areas unless engaged on the bookkeeping front and compliance with those laws is at the forefront.
    Small Business CPA
    "A tax loophole is something that benefits the other guy. If it benefits you, it's tax reform."

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    Evan did a great job of answering your questions but I will add a bit more.

    I would agree you likely won't get too many 1099's from your customers but you may get a few. You need to give one of two options to someone who asks for your tax ID. Either your SS 3 or EIN (EIN stands for Employer Identification Number.) You are not required to have an EIN until you have employees but it is better to get one if you don't want to give people your SS #.

    You need to pay quarterly estimates of your taxes to the IRS, NYS and your municipality. Basically you divide what you think you will make and the taxes you will owe and pay 1/4th of the taxes you think you will owe each quarter. Forms are available online. Then at the end of the year you file a Schedule C which shows your profit or loss and a 1040. (There are other forms you may need to file. My tax returns run about 90 pages for the business) If your quarterly estimates are too far off you will get a penalty but once you have a track record you need to pay 90% of what you owe to avoid a penalty.
    Ray Badger, Turbo Technologies, Inc.
    www.TurboTurf.com www.IceControlSprayers.com

  4. #4

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    Quote Originally Posted by Evan View Post
    You state there is no sales tax requirement on the photography services, which may or may not be true as I'm not familiar with NYS sales tax laws. The services are taxable in other jurisdictions such as Massachusetts and Connecticut, so you may wish to affiliate with other networks of similar professionals so you understand what may be pertinent to you and your industry. A local CPA may also be of great assistance, though they'll only advise you in areas where you ask questions. Commonly CPA's don't advise on sales tax areas unless engaged on the bookkeeping front and compliance with those laws is at the forefront.
    Evan, thank you so very much for your help. Your explaination was perfectly communicated so that even a novice like me could comprehend! My service is in videography not photography. I actually contacted the NYS Department of Taxation and the woman explained to me that for a business owner to be required to collect sales tax, they would have to provide something physically tangible. There is no sales tax on services rendered for consultations or digital products. Now, if I were going to download and save a video for a client onto a zip drive and I give that zip drive to them, rather than giving them a link online where they could download the video for themselves, I would have to charge sales tax. At least that was the way it was communicated to me.

    I do have a CPA who does my yearly taxes but he doesn't know so much about the business side. He was the one who suggested I contact the NYS Dept. of Taxation. I guess I can always find someone locally who is in the industry and ask about it, just to be doubly sure. Again, sincere THANKS! Very much appreciated!
    Last edited by ladyboss; 01-28-2019 at 03:49 PM.
    Video Producer & Strategist

  5. #5

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    Quote Originally Posted by turboguy View Post
    Evan did a great job of answering your questions but I will add a bit more.

    I would agree you likely won't get too many 1099's from your customers but you may get a few. You need to give one of two options to someone who asks for your tax ID. Either your SS 3 or EIN (EIN stands for Employer Identification Number.) You are not required to have an EIN until you have employees but it is better to get one if you don't want to give people your SS #.
    Appreciate you adding your thoughts to Evan's post TurboGuy. Excellent information! Yes, that's exactly why I'm applying for the EIN. Had no plans to do so until I read someone's post online. I don't want my SS# to be in too many hands. Between both of you guys, I feel I have more of an understanding of what is required of me. Many Thanks!!
    Video Producer & Strategist

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    Mr. Tax Man
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    Quote Originally Posted by ladyboss View Post
    Evan, thank you so very much for your help. Your explaination was perfectly communicated so that even a novice like me could comprehend! My service is in videography not photography. I actually contacted the NYS Department of Taxation and the woman explained to me that for a business owner to be required to collect sales tax, they would have to provide something physically tangible. There is no sales tax on services rendered for consultations or digital products. Now, if I were going to download and save a video for a client onto a zip drive and I give that zip drive to them, rather than giving them a link online where they could download the video for themselves, I would have to charge sales tax. At least that was the way it was communicated to me.

    I do have a CPA who does my yearly taxes but he doesn't know so much about the business side. He was the one who suggested I contact the NYS Dept. of Taxation. I guess I can always find someone locally who is in the industry and ask about it, just to be doubly sure. Again, sincere THANKS! Very much appreciated!
    Stay tuned, as many states are taxing even the intangible aspect of a digital product. Plus if one of your clients asks for a CD, you now have a physically tangible product. I'm a bit surprised that NYS doesn't as they usually lead the path in finding new ways to tax.
    Small Business CPA
    "A tax loophole is something that benefits the other guy. If it benefits you, it's tax reform."

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