# basic questions



## MELOC (Sep 26, 2005)

i have a few questions about getting started that i am sure are shared by many. perhaps this will eventually lead to a sticky or something.


how does one apply for a tax number? will you need to make quarterly payments or statement even if you have no income? does it vary by state?

what are your insurance needs? if i sell from the farm, will i need liability for my roadside stand? do i need insurance as a soap or candle maker?

what types of things are taxable and how? if i make crafts from timber taken right from my property, how does that affect my taxes? normally timber sales taxed, what if i sell small amounts of specialty lumber? who sets the value if i mill the lumber? would this be a capital gains tax or an income tax?

that's all i have for now.


----------



## clovis (May 13, 2002)

MELOC said:


> how does one apply for a tax number? will you need to make quarterly payments or statement even if you have no income? does it vary by state?


Are you talking about state retail tax certificate, or federal tax ID?

As for the federal tax ID, it doesn't sound like you will need one. You can use your SSN.

If you start hiring employees, I think you will need a federal tax ID.

Clove


----------



## MELOC (Sep 26, 2005)

i am talking about a state tax number...i guess. for example, when you sell at a farmer's market or flea market, you need a tax number to get a table.


----------



## Jen H (Jun 16, 2004)

Tax issues vary by state to state and county to county. Contacting your sate's Dept. of Revenue will get you started on answers that pertain to where you're living.

Here in WA state, I do have to file quarterly reports unless it's a very specific business that only brings in money annually. If I've had no business activity in a given quarter, I simply write "no business activity" and mail the form in.

Here in WA state, everything but food is taxable. Just about everything falls into a different tax bracket -- the state Dept of Revenue mails out a pamphlet several times a year breaking down which categories are charged how much tax. Again the specific amounts vary by county as well. This is why I _love_ my accountant...

If you have employees, you do need an Employee Identification Number from the IRS. It's an easy form to fill out. If you're a sole proprietorship, you can just use your social security number. If you're a partnership, LLC, or Corp your business will have it's own number.

Insurance... I carry product liability insurance on my soaps. The store has standard liability insurance to cover any injuries or whatnot. The manufacturers of every item stocked in that store have their own product liability insurance in case somebody is injured by the product itself. It's complicated, I know, but in a world where people sue for any little thing under the sun you have to make sure you're covered. I'd rather pay a few thousand in annual insurance costs than lose *everything*.


----------



## Terre d'Esprit (Aug 31, 2004)

I work for professional trade associations. A lot of your questions can be answered by visiting their websites, especially when you have a very specific business, like soap or candle making. We joined the SoapGuild, and it has been beneficial. We are even able to purchase insurance through them cheaper than what we found on our own. They also had very standard clauses that were included in the policy that many craft fairs/farmers markets requested as a matter of course.

Just google "candle association" or "soap association" or whatever.

Good luck!

T


----------



## Alice In TX/MO (May 10, 2002)

The questions:
how does one apply for a tax number?
will you need to make quarterly payments or statement even if you have no income? does it vary by state?

Me: You probably need to consult an tax accountant. Each state that has income tax is different. I am blessed to live in Texas, which does NOT have income tax.

On the federal level, yes, we make quarterly payments. It's based on your income in the previous year, but we also adjust it up if we have extra income in any quarter.

Questons:
what are your insurance needs? if i sell from the farm, will i need liability for my roadside stand? do i need insurance as a soap or candle maker?

Yes. You need liability insurance if you own and operate a business. I also have liability insurance on our farm.


----------



## katlupe (Nov 15, 2004)

Go to your state's state tax website. Put your state's name in Google with the words "state tax" and it should come up. I go to NY's state tax site all the time and I can do alot of work right there online.

Here is the one for PA: http://www.revenue.state.pa.us 

Here is one for all states: http://www.taxadmin.org/fta/link/forms.html

Hope this helps.

katlupe


----------



## beaglady (Oct 7, 2002)

You will have to file a quarterly return for your PA state sales tax, but there will be no money due unless you collected any because of sales. 

As far as liability insurance, it's certainly a good idea to protect yourself if you get sued. 
As I undertand it, if someone's house would burn down due to them using your candle (even if the candle wasn't defective) their homeowners insurance is pretty likely to come after you. If you own anythign you can't afford to lose, get insurance. Your homeowners insurer may offer a rider on your policy, at least for soap. Candles are a bit harder to insure, AFAIK.


----------



## MELOC (Sep 26, 2005)

geesh...coming after a candle manufacturer because another cannot use it properly. that takes the cake...but i absolutely believe you!


----------

