1099 Business Info!!

[JaxtonandJill]

I want to start my shop again in 2015 and make as much money as I can for the whole year. I'm worried that I will need a business license and charge sales tax as well as being in a new tax bracket.

my hubby doesn't want me to make it a business and I feel if I open my shop again that I will have no choice to because of how fast my items sell and what prices I sell my product for.

can anyone help me figure it out so I don't get myself into trouble with IRS.

Dawnel

[Former_Member]

Requirements vary from state to state. I have spent the morning looking through the site linked in a reply on this thread:

https://www.etsy.com/teams/5002/etsy-success/discuss/14782101/page/25

from: "Matthew and Sara from ananemone says:
egustaf, this blog is where I learned pretty much everything about the business/law end of things: www.gotogreatpanes.com/blog/sales-tax-business-registration/

It's fairly thorough (she has other topics, on the bottom left hand side of the page).

My advice is to do all of that stuff now. It is harder to do afterward than before.

Posted at 12:57 pm Aug 8, 2014 EDT"

I would also suggest looking up your local SBA office. They offer free counseling to people wanting to open a small business.

You definitely don't want to get into trouble with the IRS!

[Former_Member]

You won't need a new business license to open your shop again. There's no reason why you cannot use the one you already have!! Your existing state sales tax permit is probably still ok as well.

I would strongly advise you to find out exactly what your state requires and follow those rules right from the start.

Regardless of what you WANT to do, the IRS requires that all income be declared whether you call yourself a hobby or not.

If your husband doesn't want you to 'make it a business' then I would strongly advise you not to re-open a shop.

[PrairiePrimitives]

Dawnel, whether or not you will need to get a new business license (and I am thinking "business license" and not "sales tax permit" here), will depend on your local jurisdiction. While a sales tax permit is usually good until the business closes, business licenses often need to be renewed every year or two. Check with your City Clerk (if you live in a city) or County Clerk (if you live in an unincorporated or rural area).

The IRS expects you to report ALL of your income. The main difference between hobby and business (as I understand it) is that if you treat your "adventure" as a hobby, you probably won't be able to claim deductions for business expenses greater than the amount of money you bring into the "adventure" (I'm trying to not call it a business here ... LOL!). If you treat it as a business, then you can show a loss if you have more business-related expenses than you do income. Of course the IRS also expects you to show a profit at some point ... I think that's 3 out of 5 years, but it's best to check on this yourself.

[JaxtonandJill]

thank you everyone for your comments. I will be calling my state for some more info. for sure don't want to get into trouble.