Tuesday, October 6, 2009
Hello My Smart 'Trudy Durant' Ladies-
Donna Lynne Champlin here.
I have a question for you...I hope you don't mind.
I figure it might save us headaches come tax time.
I am making my own Solo CD and as a happy surprise, people are already pre ordering them directly from me.
I've priced them at $15 each.
$18 with shipping and handling.
I was wondering if there was any issue with 'sales tax' that I should be considering?
And this will be a 1099 sort of thing for me, yes?
Also, people are generously offering donations to cover the costs of making this CD by myself.
How does that work tax wise?
Should I be doing something special with that?
I admit to being completely naive to all of this.
I had just planned to sell them through an established online site that takes care of all those things-
but they also take a cut-
and if i can sell some on my own...
It would be more economical for me.
Can you please advise me as to sales tax and how i will claim this income on my 2009 return?
thank you so much.
i am hoping you are all well and happy.
What great news about your CD! There may be a sales tax issue. How are you selling the CD and are you shipping it out of state? You may have to collect NY sales tax. I will look into this further, but it will be after the 15th (we are swamped with the extension deadline). The income generated will be like 1099 income you received in the past except you will have to keep track of the income generated. You should keep a separate “bookkeeping” of the income/expenses related to the CD, so we can report it as its own entity at tax time. It is easier to keep it separate from the beginning than trying to separate it later on.
The donations are really gifts to you. There are no tax consequences for the recipient of a gift.
If you have any questions or want to discuss this further, please call me. In the mean time let me know how you are selling the CD and if it is being shipped out of NY so I can research the sales tax implications.
Trudy C Durant & Associates, LLC
1163 Inman Avenue Ste 203
Edison, NJ 08820-4511
As required by United States Treasury Regulations, you should be aware that this communication is not intended to be used, and cannot be used, for the purposes of avoiding penalties under United States tax laws.
So there you have it, darlings...
lessons learned today:
1) keep a separate budget, bank account, etc for tax purposes
2) selling your on CDs will be a 1099 situation for you come tax time
3) it seems that the only real issue with tax will be if I send a CD out of NY State?
I will get back on that with you all after the 15th
4) Claudia at Trudy Durant is awesome.... even though the required tag on the end of her emails is quite scary.