I have been repairing and building rods mostly as a hobby, but now I am starting to get enough work that it is starting to make a little money, well, I am sure that the IRS is going to want a peice of this right? I never have run my own buisness before and need advice: What will I need as far as tax ID etc? who issues these? any advice would be very helpful.

I f you have been charging $ for your work, you already have a business and some liability in excise taxes, income taxes and sales taxes.

You will want to check with your local (city,state and county) for the appropriate licenses. Depending upon your state, sales tax will be due either monthly or quarterly. Your state will issue you a sales tax ID. The IRS needs to be contacted and request form 720. Once you fill it in and mail it to them the first time, you will be on their list and they will mail you the form shortly before each quarter's returns are due.

A full article on how the excise tax works is in the Volume 1 #4 issue or Rodmaker. They are listed as sold out on the web site but I have maybe 15 copies left here.

........................

City/county: privilege license and property taxes.

State: sales tax, quarterly withholding, employment security commision and wholesale depending on where you live.

Federal: EIN, excise tax, FUTA and quarterly withholding.

Business bank account and service charges.

Hours each month for deposits, each quarter for quarterly paperwork, more hours at end of year, lots of tax hours at end of year.


Sure you still want to do this LOL?

You're already doing income taxes so that isn't an extra. You'd just have to fill out a schedule C which takes all of 20 minutes once a year, to figure your profit or loss.

Other than the excise tax and doing the monthly sales taxes, it's not that big of a deal. Just make sure you get the licenses your city or county may require for that sort of thing, if any. I figure it added maybe an hour per month to what I already had to do. That's just the small price you pay for having your own business.

Mike hits it on the head with the reality of rodbuilding as a business.
All the taxes, license fees, time spent with banking, etc. are just a part of normal operations as any established business. Rodbuilding is no different when offering for sale to the public. Perhaps in Canada we are subject to a different system, but the dreaded taxes both provincial and federal are dutifully collected and paid on a scheduled basis. Along with that consider also possiblities such as adhering to commercial zoning requirements, perhaps some peculiar county or rural taxes or licences, signage restrictions, etc. and the list can go on.
I believe much of your business operations will rely on your particular situation, but some specifics are related to collecting and paying the taxes. Like I said in Canada, it is different but we still have our Canada Customs and Revenue 'Service' to look after us to make sure we pay our 'fair share'. You may find the help of a good accountant also to your favor in saving time with a lot of the paperwork, probably money well spent.

Jnail, rodbuilders in the business can give you extremely good advice, but also look elsewhere for business advice such as a development agency, accountant, your regional or local municipal or zoning offices and such. At least find out the requirements if you have any intention of furthering your business plan. All the answers would not likely be in one place. Just my opinion, and like I said is different where I live with specific zoning and licences, even rates and methods of tax collection. All part of 'being in the business'.

It is daunting, but with some help can be rewarding. Always something to do with the paperwork and has little to do with the actual crafting at hand.

Good Luck.

Often, former IRS agents retire and start their own tax businesses.

They make excellent resources especially if they fish, nothing wrong with the barter system.