I blogged the other day about the new small side business venture I’m planning on exploring: Selling photographs I’ve taken in Europe, at Niagara Falls, in California, etc. I also stated that I would document this unfolding process for your information and mine.
My most recent contact was with my long time accountant, “Tom.” I assumed the correct form of business structure was a sole proprietorship and asked Tom if this form allowed deductions for assorted expenses. Please see below for my question and Tom’s answer:
Q: I am considering a side business selling photographs taken in Europe and Niagara Falls.
Should I consider any business structure other than a sole proprietorship? Estimated income is from a few hundred dollars per year, to perhaps a thousand or two.
If using the sole proprietorship option, can I deduct expenses: Craft show costs, framing, etc? What paperwork do you need me to maintain? Am I missing anything else I need to provide for either you or the IRS?
A: For your business you can deduct direct supplies and materials, and selling expenses such as craft shows mileage to get there advertising etc.
Simple process: Ask a qualified expert about options, document any expenses, and market the product to your chosen niche. With a little planning, fair pricing, and a desirable product, I can make a little extra money on the side. My plan is to sell primarily from a web site with a few craft or art shows added for more exposure. Once again, if I can do this, you can too. Use your talents and contacts, look for opportunity, and follow through!
Best of all, a sole proprietorship structure costs nothing for my venture.
A sole proprietorship, also known as a sole trader or simply a proprietorship, is a type of business entity that is owned and run by one individual and in which there is no legal distinction between the owner and the business. The owner receives all profits (subject to taxation specific to the business) and has unlimited responsibility for all losses and debts. Every asset of the business is owned by the proprietor and all debts of the business are the proprietor’s. This means that the owner has no less liability than if they were acting as an individual instead of as a business. It is a “sole” proprietorship in contrast with partnerships.1
By Dion D Shaw
Dion Shaw is the founder and owner of Homepreneurs.