Turning your vintage hobby into a business comes with responsibilities. Here's what you need to know to stay legal and minimize taxes.
When Hobby Becomes Business
The IRS looks at factors like profit motive, regular activity, and dependency on income. If you're selling regularly with intent to profit, you're running a business.
Basic Business Structure
Options include:
- Sole Proprietorship: Simplest, but no liability protection
- LLC: Better protection, still relatively simple
- S-Corp: For larger businesses with significant income
Sales Tax Obligations
Rules vary by state and selling platform. Generally:
- In-person sales usually require collection
- Online platforms often handle it for you
- Some states have exemptions for small sellers
Deductible Expenses
Track these common deductions:
- Cost of goods sold (inventory purchases)
- Shipping supplies and postage
- Booth rent and selling fees
- Vehicle mileage for sourcing
- Home office expenses
- Advertising and marketing
Record Keeping
Keep receipts for everything. Track all income and expenses. Simple spreadsheets work for small operations; accounting software helps as you grow.
Disclaimer: This is general information, not tax advice. Consult a professional for your specific situation.