has anyone used their craft to take a tax write off?

[valady26]

I just joined this morning and I am looking for a way to use my woodworking skills as a tax writeoff when I enter arts & crafts shows? I was told this can be done. I just moved to Alabama a year or so ago, & yes I think I have heard all the "Latest" redneck jokes!
I was told when I moved here I could save all my receipts and use them as a tax write off (?)
Questions:
do I have to get a tax id # ?
do I have to get a license to sell "my wares" at a arts & craft show?

& yes if you think these are stupid questions - you should see some of the looks I get from my husband when I said he lost his garage, NOW IT'S MINE,,,, ALL MINE!!!!!!!! HAHAHA :7
I would appreciate any advice I could get!

[Carol the Router Lady (Guest)]

The short answer is 'yes'. The long answer is to talk with a tax professional. Why not search the web for arts & crafts shows forums or chat rooms and talk with the folks already doing what you want to do? Also, go to local shows and talk with the folks there, maybe offer to help in exchange for information. I have a friend who started this. Got so good at it, his wife quit her 'real' job and joined him. They since have retired and moved out of state.

Go for it. Lots of new stuff to learn, but that is what makes it all fun!

[administrator]

Hi and welcome to our site!

On this site there are no "stupid" questions as we all learn a little bit of something from each other.

Yes, you can write off your expenses to produce your wares, but it is a little more involved than getting a tax id #. Here's an abbreviated version on how to get started.

1)Create a business identity. For a small shop usually creating a sole proprietorship is adequate.
2)Name your business ie Jane Doe dba (doing business as) Valady26 Woodworking Shop.
3)Establish a business checking account. As a sole proprietor you can use your social security number for your federal id #.
4)Apply for a sales tax number. This is the number you usually need to display or have on hand at art & craft shows. The tax collected needs to be declared on the sales tax forms regularly and filed with your state.
5)Keep accurate records of how much you spend to produce your pieces, equipment purchased, how much you make at the shows or elsewhere selling your pieces.
6) When you file your income tax this is where you get to write off your expenses. Get some help with your tax return if your uncertain about how to declare an expense or take/calculate depreciation.

Good luck and keep us posted on your progress.

Kay Strait

[John Lucas]

I think Carol and Kay gave you great answers. I would try to temper Carol's advice, re. talking to others. I think for marketing ideas, that is great, but when it comes to tax amd small business, I have heard more wrong "poop" from people on the net. It may be good and work for them, but they won't be going with you to the tax audit. Getting started with a small accountant makes lots of sense. Setting up your books at the same time as getting the name, bank account and tax ID makes sense. If you do a bit of setup now, it will be a whole lot easier on April 15th next year.
Good luck with the business and have fun at it.

[Mama bear (Guest)]

I have been in tax work for 25 years and the most important thing I can tell you is to keep good records. You must be able to prove everything. I totally agree with John, people will tell you everything you can do or not do , but you need to set down with someone of whom you can trust that does that type work and get professional advice. Unfortunately I am in a state a little north of you. It would take a few hours to get everything in order for you to keep you legal. Dont forget the use of your vehicle,too. For a bit of fun I am in the state of fast women and beautiful horses. HA!! I have been inside this hot weather. Nine backsurgeries later the heat really hurts me but soon I will be in the sawdust again. Happy Woodworking to everyone.