Whew - I have been so busy lately. Not having completed my taxes yet has really stressed me out. I am usually the first one to file as soon as I have that W2 in my hands. But with T.L.Creations starting late last year, it complicated things a bit. Especially since I did not do my due diligence and take an inventory of my stash of stuff. This has been a hard lesson learned. I am hoping that someone else who is going to start a small business reads this!
Things to remember when starting your own craft business:
- Everything goes on your tax return - there isn't a separate form for you and your business. This applies when you are Sole Proprietorship - which most small businesses start out as. I realized this - but didn't.
- Get a separate bank account just for the business - AND KEEP IT SEPARATE! While I did set up a business checking account - I still frequently used my own account to make purchases. This was so hard to find everything that I purchased - uff!!! If you are looking for a cheap business account - I went with PNC. No fees for the things that I need - plus there are quite a few branches out by me which is nice as well.
- BEFORE YOU OPEN YOUR DOORS: take inventory of everything you have. Assign it a fair market value if you don't have receipts. You don't want to say that there isn't a Cost of Goods sold - for me - since a lot of my yarn I've had for quite awhile - I assigned everything $1. That way, if I do end up audited - I can't possible owe that much - but I still get to take a little off. Here is my organized stash - unfortunately - I did not take a starting or end of year inventory. It was a mess figuring it out this weekend! Specifically - a 15 hour mess.
- If you nee to call the IRS for tax help, be prepared to get three different answers to your one question. All the time...every time. I recommend documenting your call and who you spoke with - every agent has an ID Number.
I'm sure I will think of more things - but this is what I learned this weekend. Also - this year I've decided to track my mileage with the assistance of Project Girl and her mileage tracker. I have already printed it out and it is in my car. Next year IRS - I will claim mileage. Be prepared!
Onto the better news - I have made my goal for this month and sold one item each week! I know I know, the month isn't over - but I sold two items in one week :) Both of my large afghans were sold - one even went to Canada! So excited! I'm still going to work hard to get a sale the last week of February too. But I didn't do too bad this month.
Also - head over to my store and check out my make over! I have a new banner and avatar - plus other goodies that I get to use later on. This is all from Mindy at The Tiny Cottage. She did a great job and was so quick! I ordered at 1 am Eastern Time Last night and within 20 minutes she had a proof for me with the perfect Peachy Orange color that I was asking for :) I'm going to incorporate the banner and other images onto this site as well - I'm so happy! I look professional. If you ever need logo design - contact her. She is so easy to work with - she does great work and even has a no reproduction guarantee on some items!
I have tomorrow off from my real job - looking forward to some more crafting time. Hoping to also get another post in. I need to get better at this - I have so much to say. Just never get the chance to.