I'm now covered under the cottage food laws to bake out of my home. I'm wondering if I NEED to register a business name and actually set myself up as a small business in order to do this. I only bake part-time on the side so I'm not selling a large amount of cakes. Just wondering if anyone knows the pros and cons of setting myself up as an official business vs. just selling a few cakes on the side??
Yes!!! Even if you are only selling a few cakes you need to report your income. Plus you don't want to get in trouble with the IRS. You can also deduct your buisness expenses which will help at tax time too.
You need a dba for your county, and to deal with some vendors, also need to apply for a sales & use tax number.
I am also from TX, Katy to be exact and have found out that I don't need to be licensed baking from my home for a profit or get inspected. As for tax, you do not need to tax your product if you aren't using plates, napkins or utensils or selling by the slice. But I do know that you don't need to be licensed. Very relieved about that. Hope that helps. I make cake balls so I do not tax my product. Good luck.