Collecting and Paying Taxes for Your Arts/Crafts Business

Handling the tax obligations of self-employed arts/crafts businesses can be confusing. Federal, state and local government can assess taxes. These taxes can show up in the form of income, sales, and use taxes. Find out more about the different type of self-employment taxes and which ones you may be liable for.

All individuals in the United States can opt to extend the submission of their federal income tax return Form 1040 and all attachments from April 15 to October 15 using Form 4868. If you've never had to file an extension you may be a little nervous about doing it and want to be sure that you follow all the rules. This article gives you the full...

You don't have to be an accountant to be familiar with expenses. Expenses are supplies, raw materials or services for your arts and crafts business you receive for an exchange of cash or a promise of cash that directly match to revenue you earn in a specific financial period.

If you operate as a sole proprietor, partnership, or S-Corporation to be able to write off your arts and crafts expenses, your work has to be regarded as a business rather than a hobby. The IRS has strict criteria as to the definition of a hobby versus a business. Find out the difference between the two.

There are few instances of double taxation in USA Internal Revenue Code. However, the taxation of corporate dividends and S-Corporation distributions is handled differently. Find out how to handle each one and why in the final analysis, neither is a tax-free transaction to you.

Simple tips to use when organizing your tax information.

This three part article on small business tax deductions covers keeping track of your business expenses throughout the year, tax deductions related to the cost of doing business, and home business tax deductions.

Definition of the the Fair Tax plan and how it may affect US businesses.

If you operate as a corporation or S-Corporation, report your arts and crafts taxable gross income in Part 1 of the Form 1120 or 1120S respectively. Calculate it by subtracting your cost of goods sold from your arts and crafts business revenue. Check out these step-by-step instructions on how to transfer amounts from your income statement to the applicable corporate federal tax returns.

One of my bad habits is to buy more inventory than I need. Sometimes, there’s a business purpose such as volume purchasing to get a bigger discount or I think I’ll have a use for raw materials I’m buying. Other times, I just don’t sell as much of an item as I think I will. Rather than having inventory sitting around getting dusty, find out how to donate inventory and take a business deduction.

Getting that letter in the mail from the Internal Revenue Service or your state department of revenue that your business tax return has been selected for examination is never a pleasurable experience. Even if you had a professional help, you still have a tendency to worry about what you may have screwed up – even if it was an inadvertent mistake. Here are my tips to managing your arts and crafts business records so that you’ll consider an audit a minor irritation rather than a horrifyingly stressful event.

One area of confusion when deducting business related expenses is office in the home. To be able to write off part of your home as an arts or crafts business expense you have to use that part regularly and exclusively for your arts or crafts business. Not quite sure what this means? This articles spells out what qualifies as regularly and exclusively.