I’m thinking about renting space in a local craft store to possibly sell cross stitched pictures and crocheted blankets. Can I deduct the rent I pay and the amount of money I spend on supplies on my next years taxes?

Yes, track everything that you spend and take in (including mileage!!). You will fill out a Schedule C next year. Since most small biz (and that is what you would be considered) run at a loss for the first two years you can actually lower your adjusted gross income and potentially put you into a lower tax bracket.

5 Comments

• At 2010.03.13 05:11, Larry E said:
  

  Yes but you have to claim the money from the sales as income.
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• At 2010.03.13 05:28, RanaBanana said:
  

  Yes, like the other poster stated you will also have to claim the money you make as income. Keep all receipts for supplies and your rent, you’ll need them when you file.
  References :

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• At 2010.03.13 05:39, suad.gharib said:
  

  Yes, like the other poster stated you will also have to claim the money you make as income. Keep all receipts for supplies and your rent, you’ll need them when you file.

  * 1 hour ago
  References :

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• At 2010.03.13 06:07, ErikwithaK said:
  

  Yes, as everyone else has stated. You will probably have to furnish a resale tax number or similar with you state dept of taxation which means you will have to be a legitimate business owner. Rules vary from state to state, but for the most part, I would contact your local authorities. It is usually a simple process of filing paperwork and they will furnish you with lots of information you will need in return. Supplies, rent, and many other things are dedutcable. My chamber of commerce was also a big help, as well as my tax preparer. If you have other taxed income, you will need to file a schedule C (other income) with the IRS–again, see them for the rules. All money you make is taxable income, although certain allowances are available-many of the start-up fees are also deductable. Once you are set-up, it gets much easier! SAVE ALL OF YOUR RECEIPTS for proof of where your money has gone-a good bookkeeping idea anyway!
  Have fun and Good luck!
  References :

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• At 2010.03.13 06:26, A UU Pagan said:
  

  Yes, track everything that you spend and take in (including mileage!!). You will fill out a Schedule C next year. Since most small biz (and that is what you would be considered) run at a loss for the first two years you can actually lower your adjusted gross income and potentially put you into a lower tax bracket.
  References :
  accountant.

  [Reply]