Healthcare Reform Legislation – it may affect the way you run your photography business!

I’ve mentioned ASMP [the Amerian Society of Media Photographers] in earlier posts.  They are a membership organization that looks out for, and works to protect, the rights of professional photographers.  An email that I received from them this week was to warn its members of new IRS filing requirements that are going to affect all photographers who are small businesses.

Many of us have bought and sold cameras, lens’s and other photography equipment from individuals or from sites like Craigslist and others.  Typically, these aren’t credit card transactions.  Usually it means a check or, more likely, cash changing hands.  In addition, many professional photographers have to pay for goods and services related to a shoot that, more likely than not,  requires writing a check to an individual/small business.  So, what’s all the foregoing got to do with Healthcare Reform Legislation?  If your photography has grown so that you are now a small business, there are changes created by this legislation that will significantly affect you!  

Here’s what is coming down from this new legislation.  As of now, starting next year, if you pay any person or company more than $600 [by cash or check] for goods or services you will have to fill out a Form 1099 and report it to the IRS when you file your income tax returns.  It will include not only the information regarding your purchase – but also information regarding the person or company that you paid.  So, let’s say you buy a camera or lens on Craigslist or from another photographer that you know, and you pay that person $600 or more for the goods.  You’re then going to have to ask them for their Tax ID number or Social Security Number and other identifying information for your Form 1099 filing.

What do you think are the odds that, under these conditions, anyone selling you something is going to give you the information!  What if you’re the person selling a used camera for $600+ and using the money to buy a new one?  Would you care to have a Form 1099 filled out on you?  I think the answers to these questions are “slim to none” and “no”.

From a small business perspective this requirement will impose a laborious record keeping and reporting workload.  While I understand that the IRS is trying to get a better handle on cash transactions, the net result of this new requirement will create for us, small business people, a significantly increased burden.

Fortunatley, there is one exemption to this new rule – and that’s if you pay by credit card.  Another bit of good news is that the IRS is asking for public comment regarding this new rule.  If you’re a photographer who has finally gotten enough clients/gallery work/card or calendar sales - just plain income – to be a small business you need to speak up and let the IRS know what you think of this new rule.  You can give your input by sending an email to  Notice.Comments@irscounsel.treas.gov

The bottom line here is if you are a small photography business you need to let the IRS know what you think about this new requirement.  You might also want to share this with other small business people you know – since it affects every small business in America, not just photographers.  Best – Bill

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