Friday, November 21, 2008

Etsy Thoughts: Taxes on my Mind

Since I started by shop in February, this is obviously my first year that a schedule C will be required. I started the shop for fun but I was clearly doing enough business to file taxes on it. I have registered for an Employer Identification Number (EIN) with the Federal government, obtained a Michigan State Sales Tax License and submitted a "doing business as" (DBA) form to get a Certificate of Assumed Name. And, since I'm consigning items at various boutiques around the country, I will have 1099s. And I have a work area in my house... what about business use? Life has gotten a little complicated.

I suppose the thing that keeps me feeling okay about it is that I have been keeping good records. I may very well have to wade through excess amounts of receipts and statements to assess my tax liability, but at least they are there. It would seem fortunate too that my dear husband's employer always withholds too much any way (or we have enough kids that the child tax credit does us good) so I am not likely going to have to actually pay anything, we will just get a smaller return than normal. I am in luck when it comes to outside advice as well, since both of my parents are self-employed, my mother-in-law used to work for H&R Block and my father-in-law is a tax attorney. But I'd like to be self-sufficient in this area. I file our personal taxes each year using (as recommended by my mother-in-law), and that has made the past 4 years much simpler than it could have been. I'm not sure what this tax season will allow... I might not be able to do it that way again since I may have "earned income in a state in which I do not live" via consignment... I'll have to figure that one out.

There must be a good way to keep track so taxes aren't a pull-your-hair-out stressfully loathesome thing to do. Maybe I need tax software that I know how to use (I have Quicken but cannot figure out how to reconcile things!). Maybe I need a legder and an extra 2 hours a day to keep track of daily business. Suggestions? I'm listening...

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