Can anybody offer any any ideas on how to organize a shop. Let me explain. I spoke with the person who does my taxes regarding my shop, etc., and he told me that the government considers what I do as "a hobby". When I start making serious sales, then I will probably be considered a business. In the meantime, I already obtained a sales and use tax in my state and a dba permit.
My concern is how to get organized in such a way that I will be able to deduct my expenses in my yearly tax return, when the time comes.
I have kept hard copies of all my invoices - dating back to 2009. I have kept a copy in my computer of most of my purchases, by vendor, for fast and easy access and to compare providers and prices.
I keep my beads, findings, etc., in divided plastic boxes separated by their nature vintage, modern, semiprecious gemstones, color, etc., and put a note inside each divider with the supplier, type of bead and price per bead, finding, etc., so when I am making a piece of jewelry, I know exactly how much I spent on each item. Also, when I am running out of an item I like, I can contact the same vendor and hopefully buy some more. Most of the time, when I make a piece of jewelry, I note down the amount of beads, findings, etc., their price, and the time it took me to make the piece, in a book I have for that purpose. I confess this is burdensome and I do not like to do it at all. In fact, sometimes I do not.
My problem arises when I have to deduct from a certain invoice the portion of beads I used from the set of beads covered by that particular invoice. I almost never use all of the beads I purchased on just one item. I do not know what to do about this. My tax person has not been very helpful regarding this.
I have an Excel program, but I have not used it yet. I do not like it very much.
I would really appreciate if you would share your ideas. Do you have a better way to organize supplies? Keep vendor records? The name of a book I could buy that would target my business? A computer application?
Thanks.
