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#1
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Hobby Income
Can anyone tell me: is there any tax limit on how much you can earn with
pottery as a hobby? I will probably gross $2000 next year. With this small an amount, I don't feel the need to do it as a business. Of course, I will declare the income for taxes which prompted the question. Any ideas, suggestions? Thanks for any info Marianne |
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#2
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I'm 99.9% sure that IRS doesn't care what you call it, if you make money, they
want their cut. When I started my business a few years ago I had to tell the tax man how much I thought I might make that year BEFORE they'd grant me a tax #. I told them $500 having no idea. They then granted me my resale number. Call your local tax people rather than rely on any of us on the list. We won't stand up in a court of law. :-) |
#4
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Hi. I just pulled that number out of the air as a possibility for hobby income.
I am still in the process of restablishing my home studio. Back in 92-95, I ran the pottery as a business, but I don't want that hassle if there is any way I can just declare hobby income. Here in Virginia the tax on tools and equipment can really eat up profits if you run as a business, not a hobby. |
#5
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Hi, from Australia, Question- can you set up in the US a studio and kiln
with all the gear at a place of residence, like in a residential area, produce your wares and then sell them???? Sam "Nine Tiger" wrote in message ... Can anyone tell me: is there any tax limit on how much you can earn with pottery as a hobby? I will probably gross $2000 next year. With this small an amount, I don't feel the need to do it as a business. Of course, I will declare the income for taxes which prompted the question. Any ideas, suggestions? Thanks for any info Marianne |
#6
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my understanding is yes. but i'm in california and laws that regulate whether
you can do business-at-home studio would not likely be a federal ones that apply uniformly to all states, but rather would depend on which state you're in. but i'd have to guess that there aren't any/many states that prohibit it outright. the hurdles are going to be things like: does the local government "zone" your neighborhood as prohibiting commercial (usually on applying to on-site retail) ventures? does the equipment (such as the kiln) violate local safety ordinances? blah blah blah. the short answer is: people do it all the time! |
#7
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in USA home based businesses are regulated by the cities. some cities allow
them, others don't. many set up road blocks that hamper becoming completely leagal. some cities set fees low so that everyone can declare their business. others set high fees thinking this is a good source of revenue for the city. i live in california, and in Long Beach (near los angeles) they require a fire inspection of all home based businesses. most home based people shy away from being "leagal" due to the various findings these inspections can raise & require corrected before getting a business license. obviously having a kiln may raise issues from people who don't really know or understand kilns. i know several potters in long beach who are living off their pottery & are not "leagal" in the city - no business license. some cities have small fees - like mine in claremont (or my old town lakewood) of only $50 per year. some cities (like long beach or westminster california) set fees near $300 and may require approval of potentually affected neighbors. a nasty neighbor may simply say "no". for me i like the idea of being leagal and checked with my city on rules before moving here. setting up a home based business off the radar screen of the city may backfire on you if you ever had an accident - like a fire from your kiln. your homeowner insurance may not cover such an accident. steve Subject: Hobby Income From: (SpunMud) Date: 8/16/2003 7:13 AM Pacific Daylight Time Message-id: my understanding is yes. but i'm in california and laws that regulate whether you can do business-at-home studio would not likely be a federal ones that apply uniformly to all states, but rather would depend on which state you're in. but i'd have to guess that there aren't any/many states that prohibit it outright. the hurdles are going to be things like: does the local government "zone" your neighborhood as prohibiting commercial (usually on applying to on-site retail) ventures? does the equipment (such as the kiln) violate local safety ordinances? blah blah blah. the short answer is: people do it all the time! steve graber |
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#9
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Good Info, Uncle John
Just a comment on your business failure rate in NZ compared to US. In US, 93% of new start-up businesses fail in the first year and of the 7% that make it to the 2nd year, 93% of them fail. Your NZ rate seems quite a bit better From what I have seen and experienced, failure is mostly due to extreme naivete regarding business set up, licensing, and tax laws. Moral of the story: Before you start a business, DO YOUR HOMEWORK! Find out what it costs to run your business (heat, light, water, power tools,kilns, etc.), investigate local licensing requirements and cost, check with your insurance carrier about restrictions on fire insurance, get liability insurance for the business, find out about personal property taxes in your area (most businesses must pay personal property tax on fixed assets in US), check on your state's sales tax regs (do you need a seller's permit aka: resale license?), local signage regulations. Sources of information (in US at least) are city or town licensing offices, county tax offices, utility companies, insurance companies, people in successful business, Better Business Bureau, Small Business groups on Web, etc. In CA seller's permits are issued by the Franchise Tax Bureau. Don't know about other states. Jan C. |
#10
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Your last paragraph strikes the nail on the head, in todays sub-culture of
the young, unless it's got "Billabong"(Australia) or the equivalent its 'not cool'. Value is not placed on how well an item is made, its wether its got the right 'logo' attatched. I have been in 2 full time business operations that I have started and owned, both lasting for about 4 years each, did not go broke but sold them because the work load was not equal to the money it put in my pocket. Am now a hobby potter going to college studying ceramics at 46 years of age. I have 2 gas kilns, pug mill, 2 wheels, chemicals, extruder etc and there's no way I would be brave enough to head out into the big world and go full time potting. Sam "Uncle John" wrote in message ... Jan Clauson wrote in news:w260b.72$Ls2.45 @newsread4.news.pas.earthlink.net: Good Info, Uncle John Just a comment on your business failure rate in NZ compared to US. In US, 93% of new start-up businesses fail in the first year and of the 7% that make it to the 2nd year, 93% of them fail. Your NZ rate seems I think my figure of 80% was a bit optimistic. Our business failure rate in small businesses is probably the same as yours. You are right about needing to do the background inquiries and costings before opening the doors on a new business. In New Zealand compliance costs are high both in time and real costs, particularly with dealings with the Inland Revenue Department. There's Good and Services tax (also known as GST or grab, snatch and take). Income tax, PAYE, ( this is the tax the employer deducts from his employees wages) Fringe benefit tax, company tax, and the list goes on. Every business owner is an unpaid tax gather for the government. In my experience potters generally tend to be the worst in setting up and running their pottery as a business venture. There is some sort of feeling that a pot is imbued with a built in life force and artistic merit and that buyers will not only beat a path to the front door but will kick it in as well so that they can get their hands on it. They do not have a clue what their market is, or what their production and running costs are. Ask them about depreciation on their equipment and replacement and all you get is a blank look. Probably what you look like if you've got lead poisoning. I am always amazed by the number of people who post to this group and say they have just bought a kiln and a wheel and want to set up in business, and how to go about it. What most don't realise or do not want to realise because they are "artists" that pottery production is hard physical work with long hours and endless repetition, come summer or winter. No matter what you make you need to sell it. The studio potters that are making it are market and cost driven, but then most of them, even the most popular, are holding down another job in teaching or something else. The ones that fail are the ones that felt that they control the market. Most don't even know if they want to retail or wholesale I was talking to a well respected potter the other day who has been around for ever. He said that he can sit down and make 150 coffee mugs in one sitting but he can't sell 150 mugs a year now. He is now moving on into one off brick sculpture. It also seems that most collectors are also fellow potters. Because of the influx of cheap imported ware (Italian, Chinese etc) the demand for hand made domestic ware has virtually gone. To make a go of it you need to to manufacture ( and no matter what abstract philosphy you want to imbue you work with, pottery is a manufacturing process) decorative objects of some sort. I think that the big failure is that there has been no education of the younger people who are the future market into a love of hand made craft objects, be they pottery, leatherwork, glass or what ever. I would imagine it is a world wide problem. Uncle John |
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