[Jewelry making - Article 00827] - Re: [Orchid] [Tucson 2006] General information

[Kimberly Starbard]

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Hello Everyone:

>     I'm an advocate of "sucking it up and applying for a tax number"
>     when you start selling. The records you keep and tax you submit
>     helps you verify your business in so many ways. You'll need copies
>     of your sales tax certificate/license/or whatever your taxing
>     jurisdiction issues. The other thing you need, besides your
>     business card, is evidence of wholesale purchases from your
>     suppliers. 

    I'm a bit confused by this post and I wanted to ask some questions.
    I have been making and selling jewelry for about 3 years now. I have
    a resale license from the state so I am free to make wholesale
    purchases and collect sales tax from my clients on behalf of the
    state. The resale license is the only "tax" related number I have. I
    file on a Schedule "C" at the end of each year. 

    I am confused about the need to apply for any additional numbers as
    I don't have my own store and I don't have employees. When the above
    post talks of a "tax id" are you talking about a Federal Employer
    Identification Number (EIN)? Why do you feel this is needed? You say
    that it validates a business. How is this? Are you possibly talking
    about the need for someone to obtain a loan from a bank? 

    I am concerned that people who are small businesses (like me) might
    go right out in 2006 and get a Fed. Tax I.D. thinking that they have
    to or should or might as well because they will need it later anyway.
    The reason I would not tend to obtain a Federal Tax ID number, at
    this time, would be this. If I were to apply for a tax id, I might
    have the tendency to want to classify myself as something (ie.
    partnership, LLC, corporation etc.). Here in Connecticut (I don't
    know about other states) LLC, Corps, S Corps, and partnerships have
    to pay the state a yearly tax assessment just for the right to
    operate said business in the state. People who file on a Schedule "C"
    (so far) do not. 

    I am not a CPA, although I am not misleading anyone by the above
    post. If you have questions about your personal tax status, I would
    urge you to contact you're CPA before making any changes to your
    status. 

Best Regards,
Kim Starbard
Cove Beads
p.s. I am just finishing up holiday orders and boy am I stressed


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