benefits of being an llc vs a sole proprietor as a wedding photographer
there are so many articles out there for photographers about how you should do your taxes, how you should file all the things, how you should do this and that – but there really isn’t a definite answer to any of it.
i wish i could tell you exactly what to do, but this is just my experience and my advice, talking to an accountant or lawyer in your state about you and your business is the #1 way to get the right answer on what you should do! i started my business in 2015, i never filed paperwork, i never made it official other than posting on instagram that “sincerely jules: photography” was a new tab on my website and i was available for photoshoots – but my business grew quickly and within a year i was shooting a full season of weddings. and with those weddings came money, thankfully, but also so many questions about taxes and business rules.
clients started paying me by checks made out to sincerely jules studio and i couldn’t cash them because i didn’t have a business checking account (because i didn’t have an EIN…. because i wasn’t a legal business.) so i made my choices upon necessity – i needed to cash my checks so things had to get legal. i should have done it before though, i filed the $50 paperwork with the colorado secretary of state in september of 2018… YES. three years into photography. i had to figure out everything on my own and luckily i was never audited or sued before making things official, because that’s where things get sticky and where i hear the worst horror stories (the kinds that should have made me file that $50 paperwork earlier…)
the absolute best part (and biggest reason i recommend it) of filing as an LLC is that you as the owner can have your own personal protection from business debts and if you get sued. this means if you are taken to court your business stands on it’s own and you as a person are not liable for your businesses debts – say there is a big dispute with a client, and they sue you for some reason (p.s. please make sure you have a contract that is secure as well!) and you lose in court. if you aren’t an LLC they could take your personal property like a car, house, and more. if your business is an LLC your personal property and money aren’t connected and you are secure if the worst ever does happen. sure, it doesn’t happen often, but even with a secure contract, that’s a risk i’m not willing to take! another great part about filing as an LLC is that you can still choose how you file taxes, right now you are probably filing your business income as sole proprietor income – which is correct! but once you hit thresholds, you could be wasting money on taxes! but with LLC filing you can still file as a sole proprietor AND be legallll!
so, i can’t give you an exact breakdown of how to do this in this blog (i CAN help you figure it out if you are in my mentor program though!) because every state has different rules and steps to file, and every business requires different things to know if you are ready to take this step, but i will tell you, if you have come across this post and have asked yourself “hmm, should i be an LLC?” the answer is probably yes. i like to honor the rules and do things right and i have never really been a “oh i can slide by a little longer before the IRS notices, right” kinda person…. and it’s okay if that’s you, but if you are a rule follower like me and you are making income from your photography, it’s time to look into if filing as an LLC is right for you!
some super helpful resources: the law tog