If you are an artist in the U.S., take these for steps for turning your hobby into a legal art business.
1. Obtain your Federal Employer Identification Number.
a.k.a. FEIN, EIN, FIN
Don’t scatter your Social Security Number around! Get this free ID number from the Federal government for your art business.
The Federal EIN Application takes 5 minutes and is FREE. Beware of sites that want to charge you for this service! (Updated at 8:44am MT: Previous link that charged a fee was incorrect.)
2. Register your business with your state.
Regardless of the business structure you choose (sole proprietorship, LLC, S-Corp), you must register with your state in order to be a legal entity.
In Colorado, I register my businesses with our Department of State. I also take an extra step to register my D.B.A. (Doing Business As) names, which fall under the umbrella of my S-Corporation.
3. Apply for a sales tax license with your state and city or county.
If you are selling art directly to buyers, you must have a sales tax license and collect sales taxes. Check your Department of Revenue to obtain this and to find out what additional local licenses you need.
I recommend to all of my clients that they take sales tax classes. Most states and municipalities offer these free of charge and they are well worth the time.
4. Open business accounts.
You must separate your business and personal accounts. This small step will lead to peace of mind and save you from possible future headaches (migraines!).
To obtain a business account at your bank, you will be asked for your business registration documents (see #2 above).
Get serious about making money from your art business.
The Art Biz Lift Off Self-Study takes you through the steps to create your official art Business.
Click here to read all about it. Why delay your success?