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  • I'm wondering about business aspects & liability.

    I've been wondering lately how many of us that sell our products have liability insurance, have incorporated our businesses & actually keep good records for filing proper taxes.

    In today's society law suits seem to be in vogue. meaning that almost anyone will sue for almost any reason. If you open most any phone book in any given community the largest group of listings in the yellow pages is attorneys.

    Personally I do carry liability insurance on my business as I do craft shows and farmers markets etc. I also file my taxes every year and include my business income and expenses which BTW the legitimate expenses have helped me quite alot some years with lowering my taxable income. I have a separate bank account for my business and have filed my business name with the state and have a business license.

    I'm in the process of filing for a "LLC" limited Liability Corporate status. This will make it so that if I were to be sued they would have to come after the assets of the corporation not me personally or my personal assets such as my savings, retirement and home.

    What are your thoughts on the matter. I know some will say let em sue...I hope they aren't sharing a horror story when some child picks up a small puzzle piece at a craft show and chokes on it.
    "Still Montana Mike"

    "Don't worry about old age--it doesn't last that long."
    Mike's Wood-n-Things LLC

  • #2
    Good question! I too have all the records and pay the taxes.
    The liability question is coming up more lately. In fact some of the shows in our area are requiring $1M in liability ins just to be in the show. A local group of crafters here when we are in the mall they require ins from everyone. So we got a policy to cover the group which covers us wherever we go as a group for the year.
    The other thing that is bothering me is the new Govt rules about product testing and liability. I know this has been addressed in other threads here, it is still a concern with the economy and peoples attitude now.
    I could go on about what's right and wrong, I guess I just try to do what is right .
    Bill

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    • #3
      How do these rules apply if you are consigning in a shop?

      It's all fun
      Terry
      Craftsman 18"
      Delta 46-460 lathe
      ________________________

      https://www.facebook.com/SillyLillyBowsAndMore

      Comment


      • #4
        I'd say they still apply. You are the creator so if some kid chokes on your product or they get a splinter or some such they will come after you. You still need to file taxes as you are generating income from the sales, so keep good records of your expenses as well. The expenses are deductible from your other income as well, perhaps lowering your taxable income.

        I'm just saying better safe than sorry I suppose.
        "Still Montana Mike"

        "Don't worry about old age--it doesn't last that long."
        Mike's Wood-n-Things LLC

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        • #5
          I keep records and file with the IRS. I have a state sales permit and collect sales taxes for the state. I stopped making toys this year and dropped my liability insurance.
          Hegner Polymax- 3,Hegner Multimax-3,
          "No PHD, just a DD 214"

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          • #6
            I am having to rethink my fun stuff.

            It's all fun
            Terry
            Craftsman 18"
            Delta 46-460 lathe
            ________________________

            https://www.facebook.com/SillyLillyBowsAndMore

            Comment


            • #7
              When doing shows all the time, we had to carry insurance just to be able to set up a booth. I do not carry insurance these days, but I do have a state sales permit and do file taxes on what I make...or more like Mike...just off sets some of the earned income I make from retirement. I think it is sad we must do this...not much money comes in from what we make.
              Hawaiilad
              Larry

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              • #8
                You guys who sell also have to keep an eye on the DNR, whom I have heard have been cracking down on certain exotic wood types banned from import.

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                • #9
                  I have not acted on any of these from a business sense. I do know I should at some point. Up until last year it was just a hobby and I did two shows per year. Now that I was forced into retirement I am doing more and more. I am planning to get an umbrella liability policy as a first step.
                  Scott
                  Creator of fine designer sawdust.

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                  • #10
                    Well, Mike, I'm with you all the way. I carry $1,000,000 which only costs me $398 a year. Have my own business account, getting ready to file for LLC but I am also changing my company a little. It is currently in my name & SSN. Since I now collect Soc Sec monthly, I need to change it to hubby's info as I can only make around $1400 a month. But then I lose the minority (woman) status. Since I work part time and also sell Avon, I have to be very careful. Since hubby is still working, no problems with that. Just a hassle changing everything over. I don't make toys. Never did and won't due to all the hassles. Most shows here require a sales tax number and if you don't have one, they will send your info to the state and they will contact you. I've had mine since I started. People really are losing out if they do alot of shows and don't do this as a business. Did you know that for the first 5 years you can show a loss with the IRS? Mileage deduction for the 2nd half of 2011 went up to 55.5 a mile. I do around 3,000 miles a year between everything and that deduction usually puts me in the loss column. Hotels, meals, everything adds up. Some of you just might be making more money than you think!!!
                    Betty

                    "Congress needs to realize it is a government of the people, by the people and for the people. Not of the people, by the people and for Congress." - Dr. Benjamin Carson, Pediatric Neurosurgeon, Johns Hopkins Hospital

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                    • #11
                      I just do this as a hobby. I only have a booth at a local craft gallery - they take care of paying the sales tax - after about a year I've spent far more in booth fees than sales, not to mention the cost of materials, supplies,etc. I don't really keep up with the accounting, as it would be far depressing - ha! I don't know that any of that would be worth the hassle for me....

                      Phil J.

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                      • #12
                        Betty who do you have your insurance through?
                        "Still Montana Mike"

                        "Don't worry about old age--it doesn't last that long."
                        Mike's Wood-n-Things LLC

                        Comment


                        • #13
                          If I may ask, if you're not selling toys to children, what do you need liability insurance for? If I had to purchase insurance to set up a table on a lawn at some fair, you would not see me there.

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                          • #14
                            Do not be to quick to try and set up an LLC or some other form of entity without talking to an attorney. Entities can protect you from some liability, especially that from negligent acts if employees, but generally an entity cannot shield you from liability for your own negligent acts and both you and your entity will be liable. If that is the rule in your state and you are a sole proprietor, there may be no reason to incur the cost on ongoing hassle of using an entity.
                            Doug

                            Take what you do seriously
                            Never take yourself too seriously

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                            • #15
                              Mike, Erie. The same one I have my home owners through. 2 different agents though. My SIL works at the one where I have my business insurance. Why do I need insurance if I don't sell toys? What would happen if - a child eye level with my table pulled on something and struck themself in the eye? What if I'm at an outdoor show next to a glass booth, a gust of wind comes up and blows my tent onto his breaking everything he has? What if, What if, What if. Get the picture. I plan on attending a Small Business Admin meeting in Feb. This is a day long meeting of retired business people, attorneys, accountants, etc. and they can answer any and all questions. In this state, an LLC protects your personal property from suit.
                              Betty

                              "Congress needs to realize it is a government of the people, by the people and for the people. Not of the people, by the people and for Congress." - Dr. Benjamin Carson, Pediatric Neurosurgeon, Johns Hopkins Hospital

                              Comment

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