You will need to take care of all the legal stuff before building your new art business empire.
Please note: You should always seek the advice of a legal professional for specific issues. This guide should be used for educational purposes only, and should not be construed as, or serve as a substitute for, legal advice.
As a professional artists, you are required to have a registered business and tax ID number.
Decide on your business type
Do a little research and decide what type of business structure you want to become. Many artists choose to classify their business as a sole proprietorship because it’s easy to set up and meets the needs of a basic studio practice.
Every state’s process is different, so head over to your local Clerk of County government or Town Council, your state’s Department of Revenue site, and the IRS site to see what steps are required next.
TIP: Start a separate business checking account with your bank. That way, your business and personal expenses aren’t all mixed in together when it comes time to do taxes. And, don’t forget to save your business receipts!
But before you make anything official, do some digging into what is the right name for your art business with these tips. Consider using your own name with the keywords “art” or “studio” added to the end, as long as it’s easy to pronounce and abbreviate.
Whatever you choose, be sure to double check that your name is not already taken! We’re sure you don’t want to deal with any legal battles. Plus, you are going to need a website and social media accounts with a consistent art business name so customers can find you.
Familiarize yourself with copyright law
The moment you make an original artwork, you become the owner of its copyright. This copyright gives you the exclusive privilege to control the use, production, and modification of your work.
However, having a registered copyright enables you to pursue statutory damages, which can range from $750 to $150,000. Without a registered copyright, you may only be able to recover actual damages such as lost profits and a licensing fee.
The Copyright Office offers three options for registration of images: Single image, a collection of unpublished images, or a group of published images.
File your taxes on time
When it comes to deciding if you need to file taxes as an artist, the IRS draws the line between whether you define your practice as a “hobby,” or a “business.”
If you are a sole proprietorship you will record all your sales as general income and you will deduct your expenses.
If you are like most artists making a living from your artwork, you will probably have a few other income sources from your gallery or a side gig. If this is the case, make sure you get a 1099-MISC from each different income source that you received over $600 annually and file this as along with your sales income.
There are many facets of the art world, and each one has an expert. If you have any questions about filing you taxes, always consult a tax expert. It will end up saving you money in the long run.
Before consulting an accountant, make sure to have copies of your receipts, invoices, sales reports and expense reports from your ArtExpress Dashboard . These documents will be your first resource when assessing your tax filing.