Register an LLC?

[Jogle]

Hi, all, setting aside 333 exemption questions (considering there is plenty about that on this forum), I'm wondering what people's thoughts are on registering an LLC for photography, which would include aerial photo/video services? I do normal photography for side jobs and have for awhile, which would be the primary component of the LLC, but have considered wrapping drone business into the same company. I fly safely and follow the rules, but it would also give me another level of protection, God forbid someone try to sue me for something. Any upgrades could also be written off my taxes.

Any thoughts? Do any of you do this?

 

[BigEasy]

That is exactly what I did - the tax breaks alone make it worth doing. So everything I purchase for use in the business becomes a tax deduction, as do fees, travel costs, services charges, whatever. Just make sure to keep it clean and legal and there is no really good reason not to do it.

 

[Jogle]

That is exactly what I did - the tax breaks alone make it worth doing. So everything I purchase for use in the business becomes a tax deduction, as do fees, travel costs, services charges, whatever. Just make sure to keep it clean and legal and there is no really good reason not to do it.

From what I gather, the biggest danger is making sure that the IRS doesn't relegate it to "Hobby" status. The biggest way to avoid that is by making money (and not operating at a loss).

This may sound off the wall, but do you have to charge sales tax?

Actually filing taxes will be one of the hardest things for me as I'm only used to doing my own taxes (but I am well acquainted with tracking expenses and such)

 

[BigEasy]

There is no problem with the company operating at a loss during the formation period. For instance, I have filed for but not received my 333 exemption, so until I do, I cannot make any profits.

State and local laws dictate sales tax. If I sold tangible goods, then sales tax would apply. But there is no tax for services.

I use a tax professional but it is because my tax situation is so complicated. Since I am a 100% combat-disabled veteran, I don't pay any federal or state personal taxes, but am still liable for business taxes. But since the LLC is a pass-through, it gets very complicated. I have to make sure it is right so I use a professional, but that fee is also tax deductible.

 

[aka1ceman]

...an llc is a wise decision. I've been Incorporated before and have recently changed over to an LLC for a few of my businesses. My tax attorney said I'm much better protected, LLC holds up good in court for protection, and has flexibility. And is cheaper than Inc. It varies state to state but is very easy.

 

[BigAl07]

A properly set up and administered LLC is a great idea in this situation. You'll want to make sure it's set up correctly and that you follow all the rules to a "T". The slightest mistake and your "Corporate Veil" is easily pierced should someone come after you. I let my accountant and attorney do this for me and just traded out services for services. I think I set everything up for $200 complete including my accounting software and everything.

Yes you can operate in the "red" during formation which is normal (not really optimal business speaking) but it happens and is not penalized initially. Remaining to operate in the red means something is wrong and major changes need to be made. Just don't go overboard and over extend yourself in the beginning because the deeper the hole you dig the longer it takes to get out. Operate lean and mean and don't be afraid to utilize FREE services (social media for advertising, charity events etc ) to get your name and business recognized.

You'll want to create a recognizable "Brand" and stick with it from the get-go. Getting a good looking logo, webpage, business cards, and other "media" that is complimentary to each other is a great idea. If you want to do it at a discount check your local community college to see if they have a "Print Shop". You'd be amazed of the graphic art work you can get designed and printed for pennies on a dollar there. Our advertising budget for my day job is 1/10th what it was because we utilize the local Community College for the majority of our Graphics Artist needs and printing services. We get flyers, business cards, business forms, brochures, posters and just about everything printed there at a huge discount and they are quick. We order by lunch today and pick up tomorrow. That time line does not include design work. That's for print ready work.

Also spend a LOT of time developing your name/logo. You want to make 100% sure it's free and clear or you may end up redoing everything in a few months when you get the Cease & Desist letter from a competitor with the same name. There is more to a name than "last name+drone+photos". Stand out from the crowd every chance you get.

Lastly don't skimp on liability insurance. It's fairly cheap (in aviation terms) and could also save your personal assets should something go wrong.

Good luck and Safe Flights.
Allen

 

[joe21]

Hi, all, setting aside 333 exemption questions (considering there is plenty about that on this forum), I'm wondering what people's thoughts are on registering an LLC for photography, which would include aerial photo/video services? I do normal photography for side jobs and have for awhile, which would be the primary component of the LLC, but have considered wrapping drone business into the same company. I fly safely and follow the rules, but it would also give me another level of protection, God forbid someone try to sue me for something. Any upgrades could also be written off my taxes.

Any thoughts? Do any of you do this?

It is a very good idea. However, you should talk to a good lawyer and tax accountant first. Aside from LLC, there is also a C-corporation and S-corporation. All provide different tax and legal advantages/disadvantages. Which is best for you depends on your particular situation. A professional can best advise.

 

[Jogle]

Thank you, everyone, for your replies! I will definitely sit down with a CPA to go over all the details and set it up. Just wasn't sure if many of you had considered it.

Also, for anyone who does make a profit from their drone, I'd like to put it in their ear to consider it because the protection and the benefits of an EIN make a good deal of a difference in my opinion.

State and local laws dictate sales tax. If I sold tangible goods, then sales tax would apply. But there is no tax for services.

Good call. (Also, thank you for your service)

I think I set everything up for $200 complete including my accounting software and everything.

Ding Ding. That's about the price point I've seen, too, which in my eyes is cheap considering the benefits.

Also spend a LOT of time developing your name/logo. You want to make 100% sure it's free and clear or you may end up redoing everything in a few months when you get the Cease & Desist letter from a competitor with the same name. There is more to a name than "last name+drone+photos". Stand out from the crowd every chance you get.

This will probably be the hardest thing for me! Choosing a name wisely. I'm sitting on a couple and would rather not have my name directly involved.

 

[UnrealDrones]

LLC's the best way to go in my opinion. Good protection overall, easy and cheap formation. If it's just you, or you and a few others, it should be the perfect option!

 

[BigEasy]

I did get an EIN when I formed the LLC. Also had a national name search done and then filed the names with the Secretary of State to protect them. So the official name is Louisiana UAS Services, LLC and two registered doing business as (dba) names of Southeast Louisiana Drones and also Fly-By Shootings. Then I registered as a Service-Disabled Veteran Small Business (SDVSB) with the federal government in order to get priority placement on all federal contracts. Every step of the process was vetted for legality then filed with the government. I truly believe that those who get in at the ground level now have a great opportunity to be very successful as the industry grows. Good luck!

 

[kenjancef]

A properly set up and administered LLC is a great idea in this situation. You'll want to make sure it's set up correctly and that you follow all the rules to a "T". The slightest mistake and your "Corporate Veil" is easily pierced should someone come after you. I let my accountant and attorney do this for me and just traded out services for services. I think I set everything up for $200 complete including my accounting software and everything.

Yes you can operate in the "red" during formation which is normal (not really optimal business speaking) but it happens and is not penalized initially. Remaining to operate in the red means something is wrong and major changes need to be made. Just don't go overboard and over extend yourself in the beginning because the deeper the hole you dig the longer it takes to get out. Operate lean and mean and don't be afraid to utilize FREE services (social media for advertising, charity events etc ) to get your name and business recognized.

You'll want to create a recognizable "Brand" and stick with it from the get-go. Getting a good looking logo, webpage, business cards, and other "media" that is complimentary to each other is a great idea. If you want to do it at a discount check your local community college to see if they have a "Print Shop". You'd be amazed of the graphic art work you can get designed and printed for pennies on a dollar there. Our advertising budget for my day job is 1/10th what it was because we utilize the local Community College for the majority of our Graphics Artist needs and printing services. We get flyers, business cards, business forms, brochures, posters and just about everything printed there at a huge discount and they are quick. We order by lunch today and pick up tomorrow. That time line does not include design work. That's for print ready work.

Also spend a LOT of time developing your name/logo. You want to make 100% sure it's free and clear or you may end up redoing everything in a few months when you get the Cease & Desist letter from a competitor with the same name. There is more to a name than "last name+drone+photos". Stand out from the crowd every chance you get.

Lastly don't skimp on liability insurance. It's fairly cheap (in aviation terms) and could also save your personal assets should something go wrong.

Good luck and Safe Flights.
Allen

Awesome info... any recommendations on good web sites to go to for info on setting it up and all that? I've been a sports photographer for about 5 years, and want to start making some money. I already have an N Number, and my 333 appeared on the docket on 11/19, so keeping my fingers crossed that it goes through next month or so.

 

[Jogle]

Awesome info... any recommendations on good web sites to go to for info on setting it up and all that? I've been a sports photographer for about 5 years, and want to start making some money. I already have an N Number, and my 333 appeared on the docket on 11/19, so keeping my fingers crossed that it goes through next month or so.

Not sure where you live, so know certain things change by state. Here's some great information I've been given that is generally good advice:
How to Form an LLC in Georgia | Nolo.com

 

[kenjancef]

Not sure where you live, so certain things change by state. Here's some great information I've been given is generally good advice:
How to Form an LLC in Georgia | Nolo.com

My location is right under my avatar, Rhode Island....

Thanks for the link, will check it out in the morning...

 

[BigAl07]

Awesome info... any recommendations on good web sites to go to for info on setting it up and all that? I've been a sports photographer for about 5 years, and want to start making some money. I already have an N Number, and my 333 appeared on the docket on 11/19, so keeping my fingers crossed that it goes through next month or so.

I went to my attorney and my account and let them handle all of that. By bartering services I got everything done, filed, and set up for $200. I'd say I saved about $800 by doing that. The filing alone was $200 and the software for my books was $180. They both needed some work done that I could do and we bartered services and I think we all came out to the good there.

In terms of websites there are a plethora of websites that give advice on setting up an LLC and many that will help you (for a fee) set it up. Once I got into it I had some legal and accounting questions and I wanted to do it right from the get go so I set aside the $$ to have them do it but in the end it worked out as I stated above.

Good luck and safe flights
Allen