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?

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.

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!

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!

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

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.

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!