Nothing in this thread is considered tax advice or anthing of the like. Just experiences of the posters.
I want to make my XC pay for itself and then pay for other projects like many of you. The maker parts are covered in most of the threads on the board… but what about the business side of things?
My info. I am a Solar guy. I design, install, and repair all kinda of systems. My XC is going to be manily used for the usuall products but will also be used to prototype some solar components i am working on developing. Being a Solar guy in my state, my clients dont pay sales tax on systems I install. So I have not done online sales or sold products at craft shows.
So here are a few questions I have:
Those that have alternate businesses, are you running your carving as a DBA or separate business?
How are you accounting for online sales compared to local sales (regarding tax)?
I have others and cant think of them at the moment… but others are welcome to chime in with their questions too.
For your own legal protection, form a limited liability corporation (LLC). If you business outside the state of Delaware, you can form an LLC in registered in Delaware and have no corporate tax liability. Dong this protects your personal assets (home, furniture, income, etc.) should something happen and you become the subject of a lawsuit. You can then deduct business expenses from your taxes.
My wife and I currently run an Amazon/Etsy business. It is a sole proprietorship under me. We have a sales tax account for Georgia and collect sales tax on ANY sales in the state of Georgia, whether it’s local or through Amazon. Every month I file a return saying I sold X dollars and collected Y taxes and then pay the state.
For sales tax, each state is different and it’s whether or not you have a “nexus” in the state or not. It’s complicated I beleive as to what causes a nexus to be created.
From a tax perspective, LLC vs. sole proprietorship means nothing unless the LLC has multiple partners then I believe you can share the tax liability based on partnership.
Anything that would require work at a customer location, you should have an LLC just to protect yourself. I sell vinyl decals and home decor signs. Any potential liability for that is so minimal, I’m not too worried. We do have plans to make it an LLC at some point but we don’t have any real incentive yet.
I also got turned onto GoDaddy Bookkeeping for tracking income and expenses. (http://bookkeeping.godaddy.com). The appeal for me was integrated Amazon support which nothing else seemed to have. Now all my Amazon sales get pulled in and it’s easy tracking. I link my CC to it and can categorize business expenses and also filter out personal expenses.