The end of the year is coming up fast. Time to get your records in order.
When you are in retail sales, the vendor is responsible for collecting and remitting sales tax to the appropriate government agencies. Most craft shows require the validation of either a sales tax ID number, also known as a seller's permit of a resale permit issued by your state.
Each state varies in business tax, so be sure to check your state's small business website. Generally, they are called either The Department of Revenue, the State Sales Tax Commision, or most commonly, the Franchise Tax Board. This permit allows the vendor to avoid putting up sales tax money upfront and allows you to defer remitting taxes on finished items until you sell them.
With a little creativity and stellar bookkeeping, you can make the job of figuring out taxes a whole lot easier. This article offers a few tips to make the tax process easier, and a couple of ways you might consider to save some money in the end.
Keep records of the cost of doing business. When it's time to file, these expenses are deductible. Keep the receipts for anything that you have to spend money on related to running your business. This means everything from the gas in your vehicle (usually calculated with a set mileage amount), to production costs, right to the professional advice you seek for helping you with your taxes. Even meals that constitute business meetings or are the result of business sales (usually recorded at 50%) can be deducted toward your business expense.
All craft show expenses can amount to a lot of savings at the end of the year. These are all costs related to your craft show business and building your crafts, and they can be deducted from the overall gross income you have made during the year.
Accountants are Your Friends
Hire a professional ‘Whether you hire a tax accountant, or a tax lawyer to provide you with the guidelines for calculating and filing your taxes’ they will provide you with a wealth of knowledge and expertise to help you keep as much money in your pocket and out of the greedy grasp of the tax man. Among your outside advisors, your accountant islikely to have the greatest impact on the financials of your business.
Besides tax adive, ask your accountant for advice on startup costs and taxes as well as how to financially allocate yourself for success in the future. Often times, your accountant will have good insight because of their prior experiences with other clients. Your accountant can also head statistical data collection for your crafting business, assist in charting your crafting business for future success, based on past perofrmance, and advise you on overall strategy regarding capital investment, dividends from inventory, and business goals. Most professionals are not going to charge you a fortune, and can often find numerous ways to help you lower your overall operating costs.
When in doubt, keep records. You don't always know the ways that your tax accountant can help you. Many accountants can even negate most tax requirements if books are kept a certain way. If you are wondering about whether you can claim a certain expense for your craft show business, then you should probably err on the side of caution. This way, you aren't going to kick yourself for something that could have saved you more money.
Failing to collect and remit sales taxes can lead to serious consequences including fines. Small business owners are under greater scrutiny because of tendency to overlook many aspects of tax reporting. Be diligent in your records It is important to put yourself in the same mindset to save money as you are in to make it: that means the little things count. Keeping good records will result in the offsetting of your local state and federal income taxes.
No one enjoys paying taxes on their small business. That's why you need to take this part of running your craft show business as serious as you would the money making part. By being prepared, and knowing how you can limit the amount you are required to give back to the government through good accounting and knowledge of the claims you can make as a business owner you are going to save yourself a great deal of money at the end of the year