j e motzkin on fri 4 jan 02
Carole,
If you sell wholesale to a gallery, they should have your
tax id number on file, and they pay the sales tax when
the work is sold. You need to have your business
registered with the state and have a number, often your
ssn for a self employed business owner.
Income tax is another story. If you are claiming your
business income you will need to file a Schedule C. You
should have kept records of all your expenses as well as
your income, wholesale and retail. These reported
expenses offset the income that you report. You will
also have to pay social security taxes.
For those who are starting out, it is good practice to
keep every receipt and record throughout the year,
whether you think it is important or not. Keep records of
your travel expenses and mileage, as well. It all adds up
and they may be legitimate business expenses. If you find
that you have a loss after all these expenses, that too
is okay. you are allowed to take a loss. I can't
remember, I think it is allowed in 3 out of any ?? years,
otherwise you are considered a hobbyist and it is
disallowed.
Judy
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