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Paying models in cash and dealing with the tax man
So all you guys paying models. How do you deal with paying models in cash, when they should be reporting the income? My business partners tax man, told him we need to find another way. What do we do right them a check? Jul 21 06 08:52 pm Link Xposedstudios wrote: um, screw the taxman? Jul 21 06 08:53 pm Link Puhleeze... I suppose if you were hiring Christy Turlington for $10,000/hr you might want to make sure you had that expense on your books but otherwise it's usually just cash on the table. Remember, if you're paying someone self-employed taxable income and declare it, you've reduced the value of what you've paid them by nearly 50%. Although I suppose you could, as a professional photographer, consider going to a strip club "research in lighting" and try to write it off as an expense... Give it a shot and let me know how it works, OK? mjr. Jul 21 06 09:04 pm Link Xposedstudios wrote: We pay by check. If they want cash we have one of those generic receipt books that you get at an office supply store. They just write us a receipt for the cash amount from that book. Jul 21 06 10:46 pm Link Visions Of Excess Studi wrote: Uh! I think that's only appropriate when you have no blood left for the IRS to take from you. Jul 21 06 10:50 pm Link I love this one .... it's called a 1099 folks! Ah yes, how precious the look on a model's face when she tells me she wants $150 an hour, with a three hour minimum, and I say "well, ok but, I will need your driver's license and social security card to verify your current address and properly document your information, so I can issue you a 1099 at the end of the year!" LMAO - no, I don't really do that because I am pretty much a TFCD hobbyist. Jul 21 06 11:30 pm Link J Merrill Images wrote: That's $450. You only give a 1099 for amounts in excess of $600 in a year. Jul 21 06 11:34 pm Link Yup, you are right ... and by session two, it's "paper time!" And, if she is represented by Mr. Sluggo, and you pay said sluggo and he, in turn pays her and you have used Sluggo Dymes before with the combined tab running over $600, it "paper time" again. BTW, if you pay a model on a royalty basis, the limit is only $10. Jul 21 06 11:40 pm Link It makes no difference whether you pay a model (or anyone) in cash, check, money order, credit card, or trade (i.e. your "time" at $xxx.xx per hour, or something physical such as the clothes or product you shot them with). It all has a monetary value. Just get a receipt. Along with the model release, I require an invoice and a signed IRS Form W9 (Their Social Security Number). You can download the form here: http://www.irs.gov/pub/irs-pdf/fw9.pdf Marcus J. Ranumâs cocky advice is dead wrong, but Dave Scottâs is spot on, along with Obi-wan Kenobiâs â âyou gamble enough and youâre bound to loose.â The term âProfessionalâ is not limited to the quality of your photos. -Glenn Jul 22 06 01:29 am Link Being a professional and actually giving the government a dime are two different things. Jul 22 06 01:37 am Link Visions Of Excess Studi wrote: As poor of a statement as that is, I understand what you are intending to say. Jul 22 06 02:14 am Link Glenn Francis wrote: I always work at a loss... my accountant sees to that... in the same way that GM / Ford / et al can "loose" 1.5 BILLION in a business quarter and still be in business. LOL Jul 22 06 04:13 am Link TXPhotog wrote: Actually you *can* give a 1099 for any amount you want. You just aren't *required* to do so until you reach $600 to a single payee in a given year. I've gotten them for fourteen cents. Jul 22 06 08:26 am Link I see nothing, I know nothing. Though the models I know who tour the country and get thousands a month DO report their income (at least most of it) to the government. As soon as you make enough money to support yourself, you need to prove where and how you got it, because the government does keep track of any saving/checking account with a lot of activity above a certain level of deposits, moneywise. Basically, from both a model and a photographers area, if you doing non monetary exchanges, the government is not interested. If you aren't making any income to speak of and you just model to get small amounts of cash (I would say less than 5-800 a month, especially if you are only making that much intermittantly and not depositing the cash), then that is not significant, since you would get the money back at the end of the year anyway. As for photographers, if they are paying a lot of models, they should write checks so they can document their spending and use it as a tax write off. One of my friends said his accountant told him, "So you are a photographer eh? That means everything you see is tax deductible". Most hobbyists, both photographers and models, actually lose money, so the cash is irrelevant. Especially since, in many cases the models use the money they get for more wardrobe, makeup, or travel expenses, all tax deductible if they reported it anyway. That is one reason my 'professional' model friends DO keep records....their travel and wardrobe expenses and all other things related to their field are tax deductible. Of course, this is all totally unprofessional advice. I am neither a tax advisor, nor a government official, nor an accountant or lawyer. Basically, all I know is that even with my extra modeling cash, I am still living at the poverty level, so the government is not really interested in me. They wouldn't make any money off me anyway. Jul 22 06 08:47 am Link I claim all the money that I am paid as a photographer. But as said before, I make sure on paper I spent alot more then what I was paid. I thought everyone knew this.. Mike Jul 22 06 08:54 am Link I give them a company check, have them endorse it and give them the cash and then I take the check and put it into my personal account. That gives me back the money I laid out, they get paid in cash, and the company gets a canceled check for their tax records. No money changes hands until the check and the model release are signed. IRS says if you pay over $600 to any one person you have to give them a 1099 at the end of the year. Work out the details for yourself. Jul 22 06 04:00 pm Link If I'm working with a paid model someone else is paying the model. They pay the model directly and do any reporting that's required. Jul 22 06 06:06 pm Link New Question but think it relates so putting it here. When is it better to have the client pay you and then you pay the models and crew? Giving you a write off for you paid an employee. It would be a simple in/out transaction. But is there an equation of percentages that would make this make sense? (being an egg head) When is it better just to have the client pay the models and crew? So you only touch your fee and the rest never touches your hands so no paperwork needed. Or maybe. It just doesn't matter, it just doesn't matter, ........ Aug 03 06 08:09 am Link Laurence Golden wrote: This really ins't complicated. Whether or not a model claims the money isn't the problem of the photographer. Whether or not the photographer complies with the law is. Aug 03 06 08:26 am Link When I work as a freelance costume designer or photographer, my clients claim me as an expense. You better believe I'd claim a model as an expense if I paid one. Aug 03 06 08:31 am Link Bill Gunter wrote: You raise an interesting point. While I make a lot of my money in the dual role of a photographer/producer, most photographers do not. Some photographers do get commissions where they hnave to cast and pay the talent, but the situation you describe is somewhat more common. Aug 03 06 08:31 am Link Alan from Aavian Prod wrote: I like that. Aug 03 06 08:32 am Link I always write the model a check have her endorse it and then give her cash for the check. On my release I collect social security and state ID numbers that I use to generate 1099s for everyone I pay for ANY service provided to the business. On the subject of models and their taxes, yes it is their responsibility to file and pay their taxes, however if they donât and get caught up in an IRS audit you could find yourself being audited as well. Back in 2000 I paid a model $450 for a shoot, in 2003 audited her and as part of process had a Federal subpoena to every photographer she a credited in her portfolio for their records of her payments. Because I had a filed a 1099 that resolved my part, however several out photographers who had paid her and not filed 1099s ended up paying fines and penalties to the IRS. So my advice is to document ALL payments to outside service providers. Aug 03 06 08:57 am Link Marksora wrote: Choice number 3 - It just doesn't matter, it just doesn't matter, ........ Technically and deduction wise. Aug 03 06 09:00 am Link Being a self employed (1099) photographer I keep track of everything....literally.....when it comes time for the IRS to get their annual bucket of blood.....it's there where receipts become very important.... When I first opened my studio back in Jersey.....I had just finished college....I was 40 then...and since it was being paid for the VA VochRehab....I took every course possible dealing with business....the one that paid off the best was the Income Tax Accounting..... My first two years in business....I was audited each year.....because of a run in I had before with the IRS...where they siezed my bank accounts ....this time I was prepared to do battle..... I had receipts for EVERYTHING.....all in chronological order.......and a copy of the IRS tax code.....now don't get confused here....the TAX CODE is only one book....everything else is update, modifications and changes to it which is literally a library of books.... I walked out of the IRS without having to pay a red cent....because by using their own tax code I was able to prove each and every deduction......and boy did that piss them off....especially when I turned to the exact page to point out my reasoning......they just hate it when the average person uses their own rules against tme..... That's why I was audited again the second year in busniess....I was red flagged....but the results were exactly the same as the first year.....but just to give you an example of their animosity..... When I walked into my audit.....the IRS agent looked at me and said, "oh, are you one of THOSE people who keeps ALL their receipts".....like I was commiting a sin or something.....shit...it's in their own tax code that you must keep receipts.... then the agent turns to me and says,"you look pretty well dressed for not making any money".....so I replied, "are we here to check my taxes or question how I dress?"......end of conversation......I was their all damn day....but wore the agent out looking for mistakes....and going through hundreds of receipts.....I paid nada...... I still keep receipts.....pay my taxes....a little as possible......and the IRS leaves me alone.... Aug 03 06 09:06 am Link |
