Reimbursement?

Business By SweetSusans Updated 12 Oct 2009 , 2:50am by SweetSusans

SweetSusans Posted 11 Oct 2009 , 4:46pm
post #1 of 7

I am working on starting my own business. Since my husband and I just graduated from college, I have to wait and see where he gets a job before I can officially set up anything. In the mean time, is it alright to be reimbursed by friends and family for ingredients only?

6 replies
LaBellaFlor Posted 11 Oct 2009 , 5:01pm
post #2 of 7

I'm not what your state allows, but it doesn't sound like your in "business". I would suggest giving them a list of everything you need to make them a cake. And I mean EVERYTHING! From the cakeboard to the butter. Yeah, they will have to buy the boards in a multi-pack and butter is sold by the pound, not the stick. But that stuff adds up & you my dear are starting out. When you are able to chrage they probably will have a better appreciation of what cakes cost you.

eilidh Posted 11 Oct 2009 , 5:01pm
post #3 of 7

From what I have read it all depends on which state you are in as they all have different rules. But as a general it is seen the same as accepting payment if you take donations towards ingredients. But I am sure someone in your state will be able to help you more than me (I am in the UK) . Good luck!

saffronica Posted 11 Oct 2009 , 5:07pm
post #4 of 7

I was just reading through this other thread, and someone had specifics on selling cakes in Iowa:

http://www.cakecentral.com/cake-decorating-ftopict-654632.html

Looks like for now you can sell whatever you want!

tigerhawk83 Posted 11 Oct 2009 , 9:55pm
post #5 of 7

Here's a useful link for you - it is published by the Iowa State Extension Office and covers all the rules.

http://www.extension.iastate.edu/Publications/PM1294.pdf

Doug Posted 11 Oct 2009 , 10:26pm
post #6 of 7

ahhhhh....

B U T .....

the IRS and the Iowa State Tax departments could care less about if you can or can't sell baked goods with or with out a license.

all they care about -- you ACCEPTED money in exchange for products/goods/services.

so --- that makes you liable for sales tax and income tax.

SweetSusans Posted 12 Oct 2009 , 2:50am
post #7 of 7

Thank you so much everyone! That is wonderful news! As long as I don't sell over $500, though I don't have to report the income, correct?

Thank you again!

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