sharni Posted May 25, 2011 Report Share Posted May 25, 2011 Would like some advice about where to start finding information about what i need to do to comply with laws involving being paid to do quilting for others. I know there is a difference with when it is considered a hobby and a business... I think it is determined by amount earned annually. If it is just a service through a guild and not a place of business do I need a state business license or a city license? Where do I find out these things? I want to start doing some quilts for others but want to avoid any problems with the laws. Link to comment Share on other sites More sharing options...
DoryJM Posted May 25, 2011 Report Share Posted May 25, 2011 Sharon, if you have an accountant, check with him/her. They should know all the rules. Link to comment Share on other sites More sharing options...
JustSewSimple Posted May 25, 2011 Report Share Posted May 25, 2011 Sharon, you have to keep all your tickets and such. You must show a profit in the first 3 years (no set amount - just a profit) in order to be a business. I got my LLC from the Sec. of State office of MS. It was $50. Each year I must update my information but I pay no more money. If you want to buy items wholesale you must have an official ID. Check our your Sec. of State website and see what you can find. Something I found VERY interesting!!!!! When I first went to get my taxes done (08) they counted me as a service business. So, each year we would discuss what kind of business to call it (as I teach also). This year when we went in to file our taxes, "Quilting" actually came up as a business. Ha! So I guess enough of us do it now for the tax codes to cover it. Good luck to you!!!! Link to comment Share on other sites More sharing options...
sharni Posted May 25, 2011 Author Report Share Posted May 25, 2011 Thanks for the lead on where to start for getting the information I need. Hope this builds into something fun but intend on keeping it rather small. At 65 and wanting to travel to AZ in the winter I need some seasonal freedom. I have gone to your Blog and think you have some awesome ideas such as your Quilter's Dozen Card. Link to comment Share on other sites More sharing options...
sharni Posted May 25, 2011 Author Report Share Posted May 25, 2011 Thanks, Sylvia. We all have to support our quilting habits don't we. I understand that a computer program is good to use for records. Do you use one? If so, what one is it? Link to comment Share on other sites More sharing options...
quiltmonkey Posted May 25, 2011 Report Share Posted May 25, 2011 Originally posted by sharni Thanks, Sylvia. We all have to support our quilting habits don't we. I understand that a computer program is good to use for records. Do you use one? If so, what one is it? I use Quickbooks because that is what my CPA uses. I love Quickbooks. It's super easy!!! Sharon, contact your local Small Business Development Center to get FREE advice on all of the local laws and professional points to ensure you start on the right track. Every state and location has different laws and taxes. http://www.google.com/search?sourceid=navclient&aq=1&oq=oregon+small+business+sta&ie=UTF-8&rlz=1T4GGIC_enUS282US284&q=oregon+small+business+startup The IRS has an EXCELLENT web site for starting up a small business. I strongly encourage you to look there, too. http://www.irs.gov/businesses/small/index.html Link to comment Share on other sites More sharing options...
JustSewSimple Posted May 25, 2011 Report Share Posted May 25, 2011 No, I do it the old fashioned way. I keep a notebook with my customer forms in it and each has the amount paid for services and batting and such. Then I have a month by month folder I keep reciepts in. When tax season rolls around I just add up and turn in my numbers. It may sound like it would take a long time but actually it only takes a few minutes at tax season. Now I just do this part time so I don't have the large business that others do. Link to comment Share on other sites More sharing options...
Hitomi Posted May 25, 2011 Report Share Posted May 25, 2011 In Hawaii, I just need a General Excise license. I pay taxes (income taxes) on all my earnings. I also sell items I sew and sew for people too so I claim all my income. Because I pay taxes on my income, I also write off ALL my expenses (fabric, notions, machines etc.) I am also considered self-employed, so when I go to quilt shows or to other islands to buy fabric, I get to write off my expenses (airlines, hotel, meals, classes etc.) for the trip. I think it all balances out but I am doing what I love to do (sew and quilt). Link to comment Share on other sites More sharing options...
Kueser Posted May 25, 2011 Report Share Posted May 25, 2011 Each state has different requirements. Check with your state taxing authority. Here in Kansas we have to have a state id and collect sales tax on services and sales and file yearly, quarterly, or monthly returns in addition to income taxes. Link to comment Share on other sites More sharing options...
ffq-lar Posted May 26, 2011 Report Share Posted May 26, 2011 Hi Sharon, For information about setting up a business in Oregon, contact someone like Pat Noonan, Bekah Tellez, or Beth Durand. All three have businesses in Oregon. I do know that the Feds make you show a profit (within 3 years) to demonstrate that you are a business and not a hobby. State and even county business regulations will also need to be met. No Sales tax in Oregon so you won't need to worry about that--but your state has taxes on wages and profits, so an good accountant can guide you. Keeping meticulous records for any and all costs pertaining to the business--including mileage, classes, etc.--can help your tax person minimize your tax burden. Good luck on your journey and remember to stay excited and have fun! Link to comment Share on other sites More sharing options...
Gator Posted May 26, 2011 Report Share Posted May 26, 2011 Sharon, what the others said. You can also go to the BBB or Small Business Administration. Your state should have a website which will also have info. Each state is really different. Here in Virginia I have a city business license ($40.00 per year), I also have to pay personal taxes on my "tangable equipment". I didn't make a profit in 3 years (I also work a full time day job) so my accountant had me incorporate, I think I paid the Fed Gov't $75.00 for that. I also pay the state $100.00 per year for the LLC. It can get complicated:(. If you have customers delivering items to your home, you should have insurance (to include covering their loss if something happened to your "shop/studio"). In the end is it worth it, you bet!! Link to comment Share on other sites More sharing options...
LadyLake Posted May 26, 2011 Report Share Posted May 26, 2011 Sharon, Go to your State Department of Revenue and look under Sales and Use Tax information. My state has free workshops around the state on a regular basis. Do this in addition to written information -- it really helps to meet the staff that do compliance and then you can ask them questions directly, until you completely understand. Link to comment Share on other sites More sharing options...
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