To I need to get official with a DBA or not?

[Polly]

The main reason for getting a business license is:

1. So that the government can collect taxes when appropriate.
They tend to frown on people selling things and not reporting the sales, so not paying sales tax and/or income tax.

Another reason is:
With a business license, you'll have an easier time proving that you're legit, so you can get into trade shows, and find new suppliers.  Without some type of resale ID, you are excluded from legitimate wholesale trade shows.

However, you don't really need to take credit cards.  PayPal should be fine for a small business selling online.  And for locals, you can always accept that funny green stuff called "cash"  '>.
No matter what types of online payments you accept, you will gain/lose some customers who love or hate the payment methods you've chosen to accept.

Do you still plan on doing all/most of your sales online?  Via a web site of your own?
Or do you plan on setting up at any craft shows?

If you are going to sell at craft shows, that's when you'll really need your resale ID / business license.  Otherwise you'll really start running into sales tax related problems.

I can offer a little more advice about specific ways you plan to sell ... just let me know what you're considering.

--Polly

[Polly]

I am pretty sure your tax guy has it figured out right for you.  
This does vary a bit from state to state.
And, the tax people (both state & IRS) do have some clauses for "beneath a certain dollar amount" and also whether you're actually making money or not off it yet.  
They don't REALLY want to destroy small businesses by making too much paperwork to ever get started.  It may just seem that way sometimes.  

City Hall and the Chamber of Commerce are both good places to call, to find out local business license information.  City Hall is probably where you'll buy it, but they're gov't, so have a bit different view than the Chamber of Commerce, who exists to help promote & grow local businesses.
--Polly

I am also new to selling crafts and live in Rochester, NY.  I am doing the DBA at this point (even though I am not making any money at this time) so that when I do start turnign a profit I will be all set up and legit.  I also know that some suppliers want a business license in order to buy wholesale.  I got the forms for DBA through the County Clerks office.

Helen Jacob

[StarbrightDesigns]

I will be going to get a DBA before the year is out. I really like the ocmment about getting serious and treating this as a serious venture. Now I have another question; would one DBA work for different ventures if all business is done under the same name? I am also a fine art photographer and budding graphic designer.

[Luann Udell]

LOL, yeah, that's a common reaction!  Don't let it get to you, and don't start thinking in terms of big $$ to get started.  And remember that although you will get lots of good advice and support from SCORE, most of the advisors never actually had their own business!  You will find many former employees of companies who will focus more on the nuts and bolts of your business.  But the *heart* of your business will be you, your energy and your focus and your commitment.  

Recognize that the most important single factor that will determine the success of your venture is your passion for it.  You will also need to put in the time and energy--a minimum of five years to get it truly and well launched and the ability to work at it at least a little bit almost every single day.  And you will need to stay committed through the good times and the bad times.  Believe me, no matter how well it goes, there will indeed be bad times!  It's your passion for what you do that will help you sustain your efforts at the level and duration you need to make it successful.  So don't lose sight of that with all the numbers, tax laws and paperwork flying around.

Another great resource for a new business, especially with some of the things you mentioned earlier, is the discussion forum at www.craftsreport.com.  This is a lively forum with lots of good information and wisdom shared on a daily basis.  There are some crabby people there, too, but try to ignore them.  Try going through some of the past discussions, then posting some questions of your own.  You will find dozens of other people in the same situation as you are now, and many will be glad to help.
hope this helps,
Luann

[StarbrightDesigns]

I am new to the selling game... I sold on Ebay for awhile but I got sick of giving my stuff away. I am new to going at it alone. Do I need a DBA so I can be more official? Or do I stay my course and just accept Paypal? Thanks! I am in NY state and I will not be selling much to start with.

[StarbrightDesigns]

I am so new to this I am kind of seeing where it takes me. I have been a freelance photographer for years but that is such a small scale (at least where I concentrated) that I never needed a DBA... if I was making any substantial income from a publication they usually had to put me on their pay roll. I have a fledgling site right now at www.starbrightdesigns.net I have a tiny selection up right now and I only accept paypal. And the button for that is pretty hidden. I am learning html so I can go in and fix it on my own and make the button more obvious. And locally I am trying to get into some informal shows over the holidays. Buffalo is pretty below/above the law on the small scale. So as I am figuring this all out no one had even asked me for papers. Artvoice, the paper I shoot for didn't even pay their employees on the books till 2 years ago. But no one has any money in Buffalo so I am trying to strike out to make some real sales. Where in NY would I look for getting a license? And what is the name of the license? I sell under 񘈨 a year so far so my tax guy writes it all up as a loss and told me to not take sales tax for now. Is that wrong?

[Russ Nobbs]

Your "tax guy" is right to tell you not to collect sales tax.

In most states if you PAY sales tax on  your components and materials but don't collect sales tax when you sell stuff you are OK. But if you collect sales tax and don't pay it to the state sales tax agency then they get upset and "come after you."

Please understand that any of us in this forum are just giving you our best guesses from our own experience. Your local accountants and attorneys can give you the most accurate advice.

Even in Buffalo, moderate priced craft made jewelry often does well during hard times. People like little luxuries. Goods made by crafter's hands are often seen as very affordable luxuries. (I say this having grown up in the grape growing country south of Buffalo. That area has been hard pressed for a _long_ time.)

Good luck!

[Luann Udell]

We have it so simple in New Hampshire--no sales tax!  But I got a DBA as soon as I started getting serious about generating income from my biz.  Reason was to separate out checking accounts (for tax reasons) and to reserve that name.  If you don't register it, someone else can.  

It also helped to start thinking of my work as a serious venture.  It doesn't have to make big bucks to be a serious venture, either.  I think a DBA--even if you use your name or in conjunction with your name--is a wonderful first step to saying, "This venture is real, it's deserving of my respect and energy and focus, and I expect the same respect from others."  
hth,
Luann

[Luann Udell]

I'm not sure if you mean totally separate businesses, with employees & specific expenses like rent, health insurance payments, workmen's comp, etc., or simply that you have a bunch of different income streams from being self-employed....

I don't know what the tax issues are for keeping separate business accounts separate.  However, I deliberately chose a general business name (Durable Goods) and simply treat my income from selling jewelry, selling artwork, teaching, writing and lecturing as different income streams all going into one business.  All expenses come out of that same checking count I deposit all monies into.

I *think* the IRS only cares that you are taking deductions on legitimate business expenses on your business income, and they like to see your private financial accounts separate from your business accounts.  I don't think you *have* to, but 1) it creates suspicion if you don't and 2) it's easier to keep those funds separate if you handle them separately.

These really are good questions for a tax consultant/financial advisor, and usually they'll give you a general consult free or at a reduced rate, if you simply have some broad questions to make sure you're getting off on the right foot.
hope this helps,
Luann

[StarbrightDesigns]

I am starting training soon with the local SCORE organization.. some seminars and one on one consulations. I will be building this business extremely slowly. And right now what I need is much smaller than most realize. I have had a lawyer... they just wanted 辎 to incoperate me. I have spoken with a tax guy.. ehe shuffled me right out the door. I wasn't big enough for him to bother with.

[Polly]

bump!

[azurefire]

excuse you

[Luann Udell]

Now that I'm rereading this entire thread, I realize we never actually clarified the difference between a DBA, a "business license" or a tax number.....

I believe a DBA is just a form required if you do business under any name besides your legal name.  It simply means "doing business as"....  For example, my legal name is Luann Udell and for awhile I did business as "Durable Goods".  I also had a "dba" account at a local bank, which enabled me to accept checks made out to "Durable Goods".  (I don't have one with my new bank, and so I can only deposit checks made out to me in my name.)  I don't THINK a DBA is an actual "business license"....

Also, I should have mentioned the Small Business Association (SBA) as a source for information on officially starting a business.  

hope this helps,
Luann