Questions about a "small business" (sales, attorneys)

[bobafett4ever]

Hello. I need some good advice.
My wife wants to start selling some stuff she makes. It's things she sews - like handbags and stuff.
In the past, I didn't think anything of it. She didn't do it often, or really make any money from it. But, now she is getting a lot of requests, and wants to make business cards and start selling from websites.
I'm wondering if this has gone from just a hobby to a business that would need / should be claimed for tax purposes?
What would qualify a "small business?"
She just does this stuff on the side, as we both work. It really is a hobby for her. She makes some stuff, then sells it. We aren't talking hundreds of dollars a month, at least not yet.
Is there a point (if she already hasn't reached it) where we should begin to claim this stuff, and if so - what do we do? I really don't have the time to "manage" tax stuff for a business... nor do I want to pay some crazy fees to someone to "do the taxes."
If it's complicated, I almost just want to ask her to stop.
Any advice would be greatly apprecaited!

[Francois]

I wonder if the IRS has some documentation about this, since it's their call.

Actually, this will probably get moved by the mods, since it's not a "local" question, and then you'll have people from all over answering it, not just the RDU environs, so maybe some of them are tax attorneys.

I would guess this would fall into the same category of a flea market booth.

[lovebrentwood]

Yes, just tell her to stop doing something she loves because you don't want to deal with taxes. (Geez louise.)

Have her call SCORE through the Small Business Administration, and SHE can find out what she needs to know. SCORE | Counselors to America's Small Business | SCORE

Time for YOU to step away!

[KAYLINDA]

You probably know that all income is taxable. Beyond that, most states want you to charge sales tax on what you sell. In Kansas, you just apply for a "business license" and register your business name. If she is a "sole propieter" or if you set it up as a "partnership" you will just keep track of her income and her expenses...and take them in when you do your own taxes. It's not too hard...and in the long run...at least it will be legal! When they do your taxes, you won't owe additional taxes unless your business has made money....and I think it's about ($ 600.00?) before you will have to pay income taxes. However, you will owe both the business part 7.65 and the individual part 7.65 or in other words the full 15% of any money that is profit for social security. Hope this helps some.