LeahRB Posted May 13, 2008 Share Posted May 13, 2008 I am new to candle making and so far I love it. The business side of candle making scares me to death. Can anyone tell me how much you have to sell in order for a hobby to become a small business for tax purposes? Also, just wondering how you guys knew your candle making business would succeed? Sorry for the dumb questions. I'm just starting and I'm really interested in hearing the stories of those that have gone before me. Thanks! Quote Link to comment Share on other sites More sharing options...
kandlekrazy Posted May 13, 2008 Share Posted May 13, 2008 You can do whatever you think you can get away with, but as far as the feds are concerned, if you are selling anything, you are conducting business. As far as state goes, you would need to check with your state. Most states want their sales tax, so they don't let you sell either without the proper permits/lic. A hobby is when you make stuff for yourself and for gifts. Also need to give the insurance agent your tax id and business info in order to get insurance to cover liability with candles. Quote Link to comment Share on other sites More sharing options...
wilsonswix Posted May 13, 2008 Share Posted May 13, 2008 Straight from IRS.gov......"If you are not sure whether you are running a business or simply enjoying a hobby, here are some of the factors you should consider: Do you run the activity in a businesslike manner?Does the time and effort you put into the activity indicate an intention to make a profit?Do you depend on income from the activity?If there are losses, are they due to circumstances beyond your control or did they occur in the start-up phase of the business?Have you changed methods of operation to improve profitability?Do you or your advisors have the knowledge needed to carry on the activity as a successful business?Have you made a profit in similar activities in the past?Does the activity make a profit in some years?Can you expect to make a profit in the future from the appreciation of assets used in the activity? An activity is usually considered a business if it makes a profit during at least three of the last five tax years, including the current year."There are alot of variables in there though. Keep very good records to begin with. It will make things alot easier when you change over. HTH Quote Link to comment Share on other sites More sharing options...
LeahRB Posted May 13, 2008 Author Share Posted May 13, 2008 Thanks for taking the time to answer me. So far I am only making candles and giving them away, but before I sold any I wanted to find out the proper procedure. I don't want to do anything wrong. I don't know how to go about finding out what my state requires, any suggestions? Quote Link to comment Share on other sites More sharing options...
candlesprite7 Posted May 14, 2008 Share Posted May 14, 2008 Here you go:http://www.okcommerce.gov/index.php?Itemid=41&id=17&option=content&task=view Quote Link to comment Share on other sites More sharing options...
LeahRB Posted May 15, 2008 Author Share Posted May 15, 2008 Here you go:http://www.okcommerce.gov/index.php?Itemid=41&id=17&option=content&task=viewThank you so much. I appreciate it. Quote Link to comment Share on other sites More sharing options...
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