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Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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I have a small craft business in my home and would like to

Resolved Question:

I have a small craft business in my home and would like to get a vendors license. What type of license would I get? And how would I keep records for my income taxes?
Submitted: 6 years ago.
Category: Tax
Expert:  Merlo replied 6 years ago.

What city and county are you located in?



Customer: replied 6 years ago.
Dresden Ohio and Muskingum County
Expert:  Merlo replied 6 years ago.

Hello JA Customer,


Every Ohio retailer (vendor) making taxable retail sales must obtain a vendor's license, collect sales tax, file tax returns with payments of tax collected and maintain complete records of transactions.


I am giving you a link to a section of the Muskingum County website which contains more information on the vendors license you will need, and this page also has a link to the application form that you will need to complete.


As far as your income taxes, the income you have from selling these crafts is considered income from self employment and you will need to report this income on both your federal and state tax returns at the end of the year. As a self employed person, you will be responsible for federal and state income taxes on your net income from this business, as well as the full share of SS and Medicare taxes.


Since you are self employed and no taxes are withheld from the income you receive, you should make quarterly estimated tax payments to both the IRS and to the state of OH to pay in what approximately you think you will owe at the end of the year. The amount of tax you owe will obviously depend on the volume of business that you do, and the income tax bracket that places you in.


Estimated tax payments are made to the IRS by submitting your estimated tax payment to the IRS along with voucher 1040-ES. Estimated payments are made to the state by sending in your payment along with Form IT 1040-ES.



Thank you



Customer: replied 6 years ago.
I have one more question. I retired on disability, will this mess anything up with it? It is not SS disability, it is thru the postal service, so it is civil service disability.
Expert:  Merlo replied 6 years ago.

Hello again JA Customer,


Unfortunately that is not a tax related question, and so I would not be able to give you a definite answer on this.


I do know that when you are receiving SS disability payments, you may still have up to $1,000 per month in earnings from a job or self employment and not lose your SS disability benefits. But I do not know if the postal service follows those same rules. Most disability plans do have a limit on what your earnings can be and still qualify for benefits, but those limits will vary with each plan.


You really need to check with the administrator of your disability plan to see what earnings limitations apply to you once you are receiving benefits under the disability plan.



Thank you





Customer: replied 6 years ago.
Ok. Now back to the vendor license question. There are several types of them and my original question was which one would I apply for?
Expert:  Merlo replied 6 years ago.

Hello again JA Customer,


You would need just the Regular Vendors License. This is a license issued which allows you to make retail sales in the state of Ohio. You would fill out Form ST-1 to apply for the license and the fee is $25.


On the link which I provided to you earlier, click on the link on the left hand side of the page for "Vendor's License". On the next page it is the very first vendor's license listed, and there is a link to the ST-1 application.



Thank you



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