Architectural Designs

Will I need a Business License or a Tax ID number, or is it considered a hobby?

I am a stay at home mom. I want to turn my love of desiging into a small "hobby" type career. Im starting a small home based business of Inviations / Announcements etc. All Graphic Based. I custom design or "clients" can choose from a series of already made templates made BY ME, and I give the rights of the JPG out and they can print wherever they want however they want etc... Do I need a Business license to do this? or a Tax ID number? i dont plan on charging out the rear end for services, and I heard you need to make a certain amount in a year to be made to get a Tax ID number... how does this whole thing work? TIA!

Public Comments

1. You do not need a tax id number to have a business. for tax purposes, the general rule is that you have an intent to make a profit. however, if your state has sales tax, maybe you want to get a tax id number, so you don't have to pay sales tax on stuff you resale.
2. A business license is a local permit to sell products or services. Every area has its own rules and costs associated with a business license which names you or your company as permitted to sell in the area(s) which you are applying. It has nothing to do with taxes neither sales nor income taxes. Anyone selling should have a license to sell (products or services) and if using a business name other than its owners a DBA (ficticious name registration). Most vendors and customers will have more confidence buying from what is licensed and therefore a "legal" business. Now, that's a totaly seperate thing from the governmental need for paying and collecting local sales tax and federal income tax (based on income minus deductions and credits). In many cases you can actually MAKE money by going with a legal business setup through deductions alone but an attorney and/or accountant are best to anwer for YOUR situation. There is no such thing as hobby income... income is income. All it takes is one lawsuit, genuine or frivilous, to blow your business and reputation. The permits, IDS, and professional fees are deductible. If you are serious about your business, be serious enough to protect yourself and your customers legally and financially and professionally. Either run a business or don't run a business but don't think "hobby income" will escape you from an audit, paying taxes, and paying penalties. Business is a legal matter... seek professional help in getting it done the rigt way. Check with score and sba for more information so you can enjoy the profits of your hard work and concern for quality: