Tax Questions

[Guest guest]

Yesterday brought a few tax questions. If you buy a product

wholesale and then remove it for personal use you must pay a " use

tax " instead of a " sales tax. " This is accounted for when you

submit your state sales tax, at least in California. Call your

state franchise tax board for additional info in your state.

Inventory. If you were in business last year you must complete

inventory by 12/31/00. If you have not done this stop making soap

and go back and do it. Mine took me 3 days (ouch). A good program

for learning about what is and is not inventoried, etc., is Turbo

Tax for business. This program contains a lot of information

regarding the filing of taxes, etc. Even if you have your taxes

done, it's a good idea to understand them because you are

responsible for them.

" Under the table " question - I don't think a public board is a good

forum for discussing the ins and outs of under the table (non

payment of taxes and non reporting of income). Not to be confused

with hobby versus business. Hobby you still pay sales tax and

report income as well.

Tax ID number: This is usually your social security number UNLESS

YOU HAVE EMPLOYEES. I don't know if different states (I'm in

California) require tax ID #'s for everyone in business but here I

use my SS#.

If you did not have a business last year but are starting one this

year you aren't concerned about last year's taxes but want to set

your books up proper to start, log in those receipts and record

expenses in proper categories(i.e., raw materials versus office

supplies, etc.)

Craft shows: some craft shows allow you to participate 1-2 times a

year without your own resale license, some do not. A resale

certificate is free and applied for through your state franchise tax

board. Hobby or biz, you will need one for regularly doing shows in

most states but as laws very state to state your mileage may very.

I know these are very general answers but I hope they help to

formulate where to start finding out what you need to know.