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inventory for us taxes - bonnie hellman

updated fri 13 jun 03


Diane Winters on thu 12 jun 03

Bonnie wrote:
>If you are a new ceramics business, filing a US tax return for the first
>time, you have a golden opportunity here. You have to choose a 6 digit
>business code to describe your business, and one such choice is 711510
>Independent Artists. This "occupation" does not require that you track
>inventory at all. . . . .
>It would be rare that I, as a CPA tax preparer, would want any of my artist
>clients to elect any other occupation.

When I started my tile making business some 9 years ago, I selected 327100
[clay product manufacturing] as my business activity code, essentially
following advice in an old "Artist's Tax Workbook" by Carla Messman. This
seemed appropriate especially because at that time I wasn't sure how large I
wanted to grow my company - I envisioned possibly becoming a small factory
operation. It turns out I seem to prefer working as an individual artisan
with occasional part-time assistants. Even working alone, though, I'm
somewhat like a manufacturer, since I do tiles in multiples working from my
own designs/molds rather than one-of a-kind peices.

Are there any provisions for changing one's business activity code? Would
there be advantages to doing so if I could, beyond avoiding inventory?

Diane Winters in Oakland/Berkeley wondering when the marine layer will
finally clear and give us a little warm sun.
and p.s. Thanks, Bonnie, for all your excellent tax and tax ethics posts in
the past.