The Health Care Bill vs The Sole Proprietor

Though I am not sure how successful the changes proposed in the new health care bill will work out for the millions of uninsured, I am fairly certain one of the hidden tax changes is going to hurt many sole proprietors. This article was highlighted on the yahoo home page on Friday and reading about the amount of paperwork the IRS will be expecting me to do beginning in 2012 upset me. I work as an office manager full time and am very familiar with how long it takes to gather the information and send out 1099 forms to our subcontractors each year. The IRS now wants all businesses to send out 1099 forms to all businesses (corporations included) which provide them with $600 or more of goods or services each year.

It's the part about goods that bothers me. As of right now, you only send out a 1099 form to an individual (sole proprietor) who has provided you with $600 or more in services. It makes sense. You are hiring that person to do a service which they will get paid for and which cannot be tracked easily by any other method. Generally people such as myself, who make & sell items to stores, online and at craft fairs are more visible and easy to track down without all this paperwork. Perhaps the teams that are already traveling the state checking for proper business permits could do a bit of multi taskings and pass names to the IRS of companies that they think should be audited. Then again, maybe it's too late to get the hidden tax torture erased from the bill.

Considering I have experience preparing these forms and Homemade by Hoyt would have less than 10 vendors who would qualify for a 1099, I think I can survive the change. However, I think there are many sole proprietors (artists, handymen, contractors, etc.) who work their business full time but aren't very good at paperwork. They manage to produce the required sales receipts, invoices or contracts required for the day to day business, but rely on an accountant to do the more complicated things like taxes. It could cost anywhere from a few hundred to a few thousand dollars for someone to gather the information for you and prepare the forms. Maybe it's because I'm the type of person who believes that people will always find a way to cheat, no matter how hard you try to stop them, but I think this 1099 thing is a bad idea. Are they ready to handle the piles of paperwork they are asking us to send? Do they really think they will make enough additional tax money to pay for the extra jobs? I really hope they've thought this through...

Another year gone by...

The remainder of 2009, from the time of my last posting, is a bit of a blur. As I recall, I was intertwined in my new recycled jar decoupage candle project for the remainder of the month of August. Every surface of my studio apartment was covered with recycled jars in one stage or another of the process. The tidiness of my living area might not have been compromised nearly so harshly if I had come up with a more systematic plan for accomplishing my project. But, I let my overambitious, A.D.D. admiring brain take charge… and after spending the first half of September searching for my countertops and floor underneath piles of craft supplies, I decided to listen to the logical & scattered-yet-organized part of my brain that said it was time to undertake my annual apartment re-organization. (Every year I come up with a slightly better plan for arranging my tiny studio to make it more functional and hopefully a bit more stylish as well.) This year it took approximately one month of my time digging through my possessions and choosing what to let go of, one evening with friends moving furniture, and a second hand dresser from my parents that just happened to fit the new arrangement I’d been imagining perfectly.

Let’s just say it took longer than I thought to get my apartment in order. It’s hard to find time for hours and hours of cleaning when you have a busy social life and a full time job! Oh, and did I mention I procrastinate sometimes? Anyhow, before I knew it, it was the end of November… prime candle selling season… and I had done nothing to promote my products for Christmas. I was trying not to feel guilty about it, but rather to think proactively about what I could still do, when a friend invited me to a Holiday Open House / Craft Fair at a woman’s house in town. After attending said event, I couldn’t help but think that the best thing I could do for my business this year would be to take advantage of my newly re-organized apartment and host my own holiday open house. I thought about it for a few days, then chose a date and hit the ground running.

It turned out that making the choice to plan an open house would be the catalyst for this season’s sales. The first thing I did was to start making as many candles as possible to put out on display at the party. Since I finally had fresh products available, I took photos of them and created some new listings for my website… something else that was a bit neglected in 2009, though not near as much as this blog… and I sold a few candles online, weeks before the open house. I see each purchase as a little piece of encouragement, a ray of hope for future sales if you will. I am still unsure why every year I have to remind myself that the more items I post to my website, the more likely I am to sell something… especially on a web community like mine where the most recently listed items show up first in the search results. I’m putting a demerit in my own employee file for forgetting that again.


The online orders were really just the appetizer of the season though. I finally found the motivation to re-do my candle labels! I’ve begun printing my own and feel that my new packaging looks much more professional. The holiday party was not a huge success in and of itself – I blame myself for planning something at the last minute during a month when everyone is busy every weekend – but I did have a few visitors who enjoyed some Irish Whiskey and sweets while perusing my current candle & soap lines. Furthermore, several people who couldn’t make it to the party responded to the evite asking if they could see my products at a different time. So, I set up a mobile candle shop in the back of my Honda CRV… and that turned out to be the real moneymaker of the season. I can’t say that it was my ideal sales situation… having to cart baskets & bags of candles back & forth from my car, making sure they stay shaded so the colors & scents don’t fade, filling up the gas tank more than my usual weekly allotment to allow for the extra weight and mileage… but I had a surprising amount of fun doing it. My favorite moment was when my friend caught a stranger eyeing us like she was ensuring there was no drug deal taking place on her watch and we invited her over to see the candles. The woman did buy a candle, but I still think she may have been nudged by the guilt of having looked at us so accusingly.


So, what now? Christmas is over, but people everywhere will still be burning candles for months, especially in the colder parts of the country & world. The year-round challenge of how to get more customers to my website continues. I have greatly increased my presence on Facebook and have begun offering sale items and occasional promotional discounts on my products. I finally signed up for a google adwords account and have already begun two advertising campaigns. And, I have a brand new color laser printer on the way to help me create marketing materials for several more new ideas I have in the works. I am hopeful that this new enthusiasm I have felt over the past month will continue into 2010.