I am off to Puerto Rico for the week, headed to a small island with little to no cell service or internet. Some might be scared by that, but I am actually kind of excited to unplug. The shop is still open and you can place orders as you wish while I am gone. Shipping on orders after Wednesday April 19th will not ship until the week of May 8th. See you when I get back! :)
Super excited about my new toy! It's called a Pancake Die. I had them custom made and designed to cut out my moth designs. Man this hand toy is saving my wrist form carpal tunnel! Each moth will still be hand stamped one at a time with all its detail making them each still unique. But now I wont have to saw them out individually. This is going to open up a whole new world to design more moth jewelry. I am very excited about the possibilities! Stay tuned :)
When I first started making jewelry for a 'living' I had no clue what I was doing. I was in my mid 20's and had just moved back in with mom. I never really researched the business aspects of running a business... i.e. taxes, licenses, sales tax, etc. So the first year I filed my taxes as a business owner I was completely unprepared for the reality of owing any money. I thought, I made less then $10,000 I have zero money to my name, how could I possibly owe taxes? After all, I was so used to filing that W2 and getting money back. Call me naive' and I was, I ended up owing thousands, I instantly broke down in tears.
When you are going from a hobbyist to a legit business owner, you have to pay a lot more in taxes. You are now in charge of paying both sides of your social security and medicade (or is is medicare.. I can never remember)- when before your employer paid half, and the other half was taken from your check before you could even miss it. You also now are hit with SELF EMPLOYMENT tax. Yea, you get a tax on top of your income tax just for being your own boss. Its a cruel world. But I'm not done..
Then there is sales tax. Yep, one more tax you have to pay on the goods sold.
Net vs Gross- you pay taxes on your NET income. This is your Gross (the big number) minus all your expenses, (supplies, postage, travel, web hosting, millage, etc). You want to get that Net number as low as you can. And now I understand why people have company cars, offer to pay for large business meetings meals, or buy a new computer every year- because its a write off. And believe me, you WANT them.
Its been over 6 years since I have been running my own business and with each tax season I feel a little more prepared, but only a little, I mean taxes just suck, but its a part of life and its the same time every year. So be prepared!
Every year you want your business to grow so you must adjust your tax strategy accordingly. Really look at your numbers each year. Now decide how much you think or want to grow, is it 20, 30, 40%?!
Take that number and pay your taxes QUARTERLY based upon that number.
Paying (1) Federal, (2) State and (3) Sales taxes all quarterly will ease the burden of having to pay in a huge lump sum at the end of the year. No one wants to take all the money they have saved and pay taxes- or worse, not have the money to pay them at all. Estimate quarterlies HIGH. If you make less then what you thought, you may just get a refund for over payment; and in which case the IRS became a savings account you couldn't touch for a year.
My favorite accounting software is Intuit Small Business quickbooks -it keeps everything organized and so I can see my spending charted, the estimated tax I owe, categorize my deductions and just have a really clear view of how my business is doing. You can link your checking accounts, Paypal and even your Etsy account. Its one touch updating. I swear by this app, get it on your phone and its liked to your desktop version as well. If you are an Etsy seller you even get a discounted rate of $5 a month. Not to bad right, plus guess what, its a TAX WRITE OFF!
Here is the Etsy Version of Intuit Small business quickbooks.
** Disclaimer-please talk to your accountant, I am NOT a tax person, this is my personal experience.
Very excited to be shooting the new spring lookbook today! Picking out the clothing and styling is one of my favorite things. But, I have been so busy.. aren't we all, that I really didn't think about what I wanted this lookbook to look like. At the last minute it all came together and I can't wait to shoot it and get this new collection out! Stay tuned, its coming in MAY!
I love doing custom work when I feel confident in what I'm doing. This project was so much fun. One of my best friends came to the studio and picked out this amazing super flashy labradorite stone. Then she said, "I don't know what I want, just do you thing." That is like music to my ears! My friend Mya is a bad ass archer + hunter. I wanted to created something that was personal to her, so I choose the crossed arrows to cut into the back of the cab and along the wide bad. She was thrilled and BONUS, it fit her perfectly!
I'm are glad you're here! Peek into my life as a maker & designer of C. Alexandria jewelry & stylist for H. Claire Photography. I love art, history, interior design, thrift shopping and anything that peeks my curiosity.