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#1 texasmama319

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Posted 27 May 2017 - 10:05 AM

I have been doing stained glass things as a hobby since 2009. I have made some sales but nothing significant. I have never reported it on my taxes. This year I put some stuff in 2 stores in my hometown and started selling a bit through my facebook page.. So far I have made about $400ish this year. This is the most I've ever really made so I has made me start thinking about taxes and stuff. I just registered for a sales tax thing with my state (Texas) and I looked into registering my business and all of that. It would cost me around $400 just to have all of that done...is it necessary? Almost all of what I have made this year has gone back into supplies, travel, and food. 

It will take me a while to save up enough to afford an accountant or to register my business, should I stop selling until then? 

I just don't know what to do. I love stained glass and selling things is fun but I don't want to get in trouble with the IRS.

This is all confusing and frustrating. I'm not even sure what to ask really....just what the heck do I do? 

From what I understand I can either file as a hobby or a business...I'd be doing this regardless of if I made any profit so that makes it a hobby right? 

All the articles I read online seem to be geared more towards someone running a store. I have a desk in my laundry room and sell through facebook messages so I don't feel like I relate to those.. 

 

I'm not sure if I am making any sense but I would appreciate any advice or help from you guys. This has me stressed and it is affecting my art



#2 Mt_Top

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Posted 27 May 2017 - 11:58 AM

Put your mind at ease, make an appointment with a local tax accountant.  They can inform you on what is proper and legal. 



#3 FantasyStainedGlass

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Posted 29 May 2017 - 08:21 PM

I live in California and came across the same questions you have.  If I would sell at a craft fair, you needed to have a tax ID number or a selling number from the CA tax board which you could get online in less then a few hours,  it was a temporary ID number that would be good for a set period of time (the time of year or whatever time it is you do the selling at the craft fair or where ever it is you sell your glass).  The form you would fill out to be sent in was due by a certain date and it basically asks you how much you sold, your break down of materials or fees you paid to sell if at a craft fair (the booth space) etc.  It was a very basic form and easy to fill out (it has very good instructions to fill it out) and you use the calculation figures of the rate of taxes in your state and when you do this, you will figure out what the tax is that you pay when you send the form in to be filed.  If I were you, I would go online for your state (tax board) and do a search for selling crafts or arts in your state and see what it tells you.  When you find that out, there it will should tell you which forms you need to sell. download the forms or fill out on line.  There should not be any fee for you to do this.  If you do not sell anything, there is a box on the form that should be checked.  In California I could not sell at a craft fair unless I had the state selling number as it was required by the people who ran the craft fairs.  So check out online with your state.  You will find that it is not as bad as what you think.  If you run into problems, there should be listed telephone numbers you can call and get the help you need.  I have had to call and everyone was very nice and they can also get your number for you as they will fill out the form for you and issue you a number and then send you a letter with the information you will need along with when the taxes are due.

 

You can get a fictitious business name as that is the cheaper way to go, that is done thru the county recorder's office in the county you live in, then you would need to have it printed in the paper (select whatever paper is the cheapest to do that even if it is a local newspaper like Good Times.  There will be a list of papers you should be able to print in so ask the recorder when you file for the business name.

 

I sell on eBay and they require that unless you sell over $20,000.00 in a years time (it is in the eBay policies and also in help & section I believe under taxes or paying taxes on sales), that you do not need to charge people for the sales tax as that is up to you, and if you charge the buyers the tax, you need to make sure it goes back to your state and it is claimed by you.  I do not sell that much and I therefore do not charge sales tax and do not pay any sales tax either.

 

When I sold at craft fairs I did pay taxes on the sales only, and it was not bad at all, as I recall, we sold $1,100.00 at one fair we did and the taxes we paid was something like $1.10!  Do not let it scare you.  Do the research online and ease your mind.

 

I hope this helps you out some.



#4 texasmama319

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Posted 06 June 2017 - 02:13 PM

Thank you it did help me out! I have a sales tax permit now which is all I think I need in Texas.

My other problem is this: how do I account for everything since 2009? I have been buying glass and tools since then but I have no record of it. I have also made a few sales here and there but nothing significant and there are also no records of this other than if I was paid on paypal.
I am doing a festival this weekend and I am considering it my offical start date with recordkeeping. Will not having records of previous years come back on me later? I wouldn't even know where to start with it all.

#5 FantasyStainedGlass

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Posted 06 June 2017 - 06:24 PM

Good for you!  Congratulations, you did it!

 

My suggestion would be to try and keep track of what you use to make each item, then use the current prices of what those supplies are because you will have to eventually replace them.  Do not forget to add in the waste factor for the glass when making the item, it all adds up.  For what you are doing right now, this seems to be the easiest way for now.  This is how I do it as I had gotten all my tools, glass, supplies for years (20 years of collecting things), yet when I have to replace something now, it is much more expensive than when I originally got it.  It actually makes me laugh when I pull out a piece of glass and see $3.95 a square foot on it,  yes it is that old, yet the current price is more like $18.00+ per square foot for the same glass now!

 

If you are looking to do a business, I personally would go and see a certified public accountant/tax person to advise you on what can and cannot be deducted in a business and what applies to your situation if you are looking to open a business, have employees, etc. That is a totally different ball game then.  More responsibility, more paperwork, taxes, profit and loss statements, depreciation on the tools,  etc.  We had a commercial fishing business and I had to keep the books, and I had it all on the computer so all I had to do was print out the reports for the CPA.  If I missed something, it was on the computer and it was just a matter of printing it out.  It was a lot of work as you have to keep track of everything, all the way down to each fishing hook, the bait, diesel, the boat costs, the docking fees, all the licenses for the fish/crabs, our licenses, the permits for the boat, what we brought in for the sales of the fish/crabs, everything there was with the business.  It would be the same for a stained glass business if you want to be accurate with it, which you should be to be on the straight and narrow and not get yourself in trouble with the IRS or send up any red flags with the IRS.

 

Have a good selling experience at the festival!






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