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No. I officially went out of business in Idaho. Also, it was under another name though I guess you can always DBA under an LLC.
A question on liability
- Thread starter Rennie Heuer
- Start date
No. I officially went out of business in Idaho. Also, it was under another name though I guess you can always DBA under an LLC.
Martino Amello
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I'vce has a few S & D letters sent my way back when I was selling "Sawzall's" that weren't the Milwaukee brand, but I did make a few bucks along the way.
Martino Amello
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..and our mom's beat the day lights out of us in public, especially in grocery stores when we threw ourselves on the floor screaming when she wouldn't buy us our favorite brand of Poofy Flakes or whatever. I yanked my son by the short hairs out to the car for a "talking to" once over that and got a round of applause after coming back in the store..When I was a kid, WITHOUT seat belts
Paul Downes
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You can be sued for just about anything...........https://listverse.com/2018/04/27/10-times-farts-broke-the-law/
You can separate some liability from your personal property with an LLC. Which was what I did for my woodworking business. Unfortunately you have to hire a lawyer to have a disclaimer statement written for a businesses products which doesn't mean it will provide an impenetrable shield, but it might help or discourage some gold diggers from pursuing the frivolous lawsuits.
You can separate some liability from your personal property with an LLC. Which was what I did for my woodworking business. Unfortunately you have to hire a lawyer to have a disclaimer statement written for a businesses products which doesn't mean it will provide an impenetrable shield, but it might help or discourage some gold diggers from pursuing the frivolous lawsuits.
Jim Welton
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Weird first thread to jump into (hello) but why not. Random stranger suggesting if you are building doll furniture because you have a passion to build doll furniture, go for it with all flags flying, and accept the risks.
If you are just trying to find a way to have someone else cover your hobby, list a couple items, cautiously see where it goes.
Just in it for the bucks? Not worth the risk.
I met a guy who inherited a pharmacy back in the 1980s. In the pharmacy was a little area where they sold doll houses and accessories. He found those costumers to be the most interesting and was hooked, on selling not buying. By the early 2000s he was a millionaire from importing exact replicas of early American wall paper intended for doll houses. (And other items but wallpaper was the majority of sales. Yes, people love their hobbies and will spend a few bucks.
If you are just trying to find a way to have someone else cover your hobby, list a couple items, cautiously see where it goes.
Just in it for the bucks? Not worth the risk.
I met a guy who inherited a pharmacy back in the 1980s. In the pharmacy was a little area where they sold doll houses and accessories. He found those costumers to be the most interesting and was hooked, on selling not buying. By the early 2000s he was a millionaire from importing exact replicas of early American wall paper intended for doll houses. (And other items but wallpaper was the majority of sales. Yes, people love their hobbies and will spend a few bucks.
Mike Stafford
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Back when I was building toys I was very careful about the sizes of removable pieces. I followed the Consumer Safety Product Commission guidelines. I finally just stopped having removable pieces unless they were logs, crates or something similar for loading on a flatbed train car or truck. I stopped making airplanes with propellers that would rotate. Then I stopped making propellers and any items with propellers.
I also conducted the glue tests and had photographs showing the assembly of glued parts and the pictures of the torque tests that were required to prove adequate adhesion.
Basically the simpler a toy was the better off the maker is., i.e. a chunk of 2X4 with four wheels and axles is relatively safe as long as the glueing is adequate.
I carried a $1 million umbrella policy just in case. Never had to use it. I stopped making wooden toys because it was just too difficult to track costs for taxes. Everything the government does is to discourage small businesses. They decided to change the reporting level for ETSY and similar venues so I stopped using ETSY. Just too much trouble to account for every piece of wood. I figure with all the time I had invested in record keeping and taxes I never made a dime for myself.
I also conducted the glue tests and had photographs showing the assembly of glued parts and the pictures of the torque tests that were required to prove adequate adhesion.
Basically the simpler a toy was the better off the maker is., i.e. a chunk of 2X4 with four wheels and axles is relatively safe as long as the glueing is adequate.
I carried a $1 million umbrella policy just in case. Never had to use it. I stopped making wooden toys because it was just too difficult to track costs for taxes. Everything the government does is to discourage small businesses. They decided to change the reporting level for ETSY and similar venues so I stopped using ETSY. Just too much trouble to account for every piece of wood. I figure with all the time I had invested in record keeping and taxes I never made a dime for myself.
Charlie Plesums
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An old topic reawakens.
I no longer make children's furniture or bunk beds. My quilt chests are specifically not toy chests, but usually are built with soft close hinges (child proof hinges) and a strong enough bottom so a kid doesn't fall through if he climbs inside.
I do not build anything that has to attach to a property. A cabinet to slide into a niche is okay, but I am not a licensed contractor to attach something to the property. I might build a wall-hung cabinet that the homeowner can attach to the wall, but not me.
All that being said, don't be lulled into complacency by a corporation. If you have a bunch of employees, and who did the work is only the group, then the corporation becomes the only target for a law suit. If you are a solo woodworker, the lawyers can identify who did the work even if you hide in a corporation, they can still come after you personally. I do have a multi-million dollar Umbrella policy (I got that because of a swimming pool at my previous home but it is still in force).
You can do cash basis accounting rather than accrual basis. With cash basis, the entire load of wood is an expense when it is bought, you do not keep track of each item. The sale is booked only when you are paid. I have a bunch of lumber left over, in the attic, that legally has no value, since Cash basis does not have inventory... it will get value when it is made into something and is sold (even though the expense to buy it may have occurred a year or two ago). I report income (sales) and expenses on Schedule C of my personal income tax. I do business as "Charles Plesums" so that I don't have to get into the legal issues of doing business under an assumed name. Think of yourself as like an artist, working at home, who only has income when they sell a painting, and has expenses when they buy their supplies, and properly reports their income and expenses on Schedule C.
I no longer make children's furniture or bunk beds. My quilt chests are specifically not toy chests, but usually are built with soft close hinges (child proof hinges) and a strong enough bottom so a kid doesn't fall through if he climbs inside.
I do not build anything that has to attach to a property. A cabinet to slide into a niche is okay, but I am not a licensed contractor to attach something to the property. I might build a wall-hung cabinet that the homeowner can attach to the wall, but not me.
All that being said, don't be lulled into complacency by a corporation. If you have a bunch of employees, and who did the work is only the group, then the corporation becomes the only target for a law suit. If you are a solo woodworker, the lawyers can identify who did the work even if you hide in a corporation, they can still come after you personally. I do have a multi-million dollar Umbrella policy (I got that because of a swimming pool at my previous home but it is still in force).
You can do cash basis accounting rather than accrual basis. With cash basis, the entire load of wood is an expense when it is bought, you do not keep track of each item. The sale is booked only when you are paid. I have a bunch of lumber left over, in the attic, that legally has no value, since Cash basis does not have inventory... it will get value when it is made into something and is sold (even though the expense to buy it may have occurred a year or two ago). I report income (sales) and expenses on Schedule C of my personal income tax. I do business as "Charles Plesums" so that I don't have to get into the legal issues of doing business under an assumed name. Think of yourself as like an artist, working at home, who only has income when they sell a painting, and has expenses when they buy their supplies, and properly reports their income and expenses on Schedule C.
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This is an excellent point.
One note is that there was an IRS rule change during the 2018 Regime that disallowed claiming ANY expenses for "businesses" that ended up classed as a "hobby":
If the IRS classifies your business as a hobby, it won't allow you to deduct any expenses or take any loss for it on your tax return. Beginning in 2018 and lasting through 2025, miscellaneous itemized deductions are no longer deductible and therefore no hobby expense is able to reduce hobby income.
The rules around what end up classified as a hobby or not are .. more than a touch hand waving and wishy washy and subjectively subjective but objectively terrible but mostly boil down to "can you show a legitimate effort to make a meaningful profit as compared to your other income in three of five years" - Some decent discussion here (which is farm oriented.. but most of the concepts carry over - and I have this handy for.. um.. reasons.. we'll see if we end up with another post or not in a few months): https://extension.usu.edu/ruraltax/tax-topics/farm-losses-versus-hobby-losses