Etsy acounts for kids

[Slinky]

My 7year old DD would like to start a business. We have settled on hand made greeting cards and are planning to sell them through Etsy. I was wondering if anyone had experince with setting up a business for their child on Etsy and how you went about it.

Did you attach it to your own accounts or create a bank and pay pal accounts for your child so they could use their own money for fees and such?

What do you do about taxes and at what point do you need a business license for a child?

What has worked best for you and your child?

[Slinky]

So no one has any advice or suggestions?

[Home4skool]

You know, I love the *idea* of Etsy--absolutely--and was hoping to see this thread grow as well! I've read about it on other forums, but yours was the first I saw of creating a biz with a child, a fabulous idea! I hope someone else will chime in :)

[Slinky]

I was hoping it would grow as well because she is very excited to get started. I am also open to ideas other then Etsy.

[Marcy]

Here’s what I’m doing to set my daughter up on Etsy. We haven’t got our shop going yet, we’re hoping to in the next week or so. Keep in mind that what follows is to the best of my understanding and I could be completely wrong. Please check everything out for yourself. I did contact the Dept of Labor in my state to verify that a minor could operate a business. I was assuming they could but wanted to make sure.

What Haley, 10, and I decided to do is create a shop together so we’ll have a better chance of keeping it stocked. I read somewhere on Etsy that’s what they prefer, but a kid can open a shop by themselves, so whichever is fine. Because selling on Etsy is engaging in retail sales someone is required to collect state sales tax, and from what I’ve read in some states there’s county taxes as well. Check with your state to see exactly what to do there. Should be on their website.

To collect sales tax you have to file for a sales and use tax certificate. The form I used was on the Dept of Revenue’s website for my state. In Kentucky I had to acquire a federal EIN to file, again real simply just go to irs.gov and look it up. I did it online in less than 10 mins. Once I have my sale and use tax number I will issue Haley a blanket resale certificate(Dept of Revenue) and then I’ll buy from her what she sells and collect the taxes under my number.

In Kentucky, Haley could have filed for the sale and use tax certificate herself, though I was told they (the dept of revenue, I called them) would prefer I did it the way I said above. And I believe in TX a parent has to file on behalf of the minor. Shouldn’t be hard to look up for your state.

You shouldn’t need any business licenses, check with your county clerks office. Nor should you have to register the business, as it would be a sole proprietorship. Or in our case two. If you decide to “do business as” any name other than your own, or you daughter’s, you’ll have to file a DBA form with your county clerk, in my county it’s $15. Has to be renewed every 5 years I think. I chose not to do that. Having an Etsy shop name isn’t the same, you’re DBA only if you’re using that name on checks and what not.

About checking accounts. People under 18 cannot be held to contracts as adults can so banks won’t generally open a checking account with anyone under that age. I’ve read some will allow a co-signed account with a parent that doesn’t necessarily have the parents name on the checks for people 16 and 17. And that there are some banks that will issue a debit card in the child’s name on the parents account but all I’ve seen is for 13 and over. And PayPal is the same.

I’m not worried about Haley using a cash method for purchases and keeping the receipts. There’s a good chance she won’t even make enough to file income tax. Though I’m guessing she’ll want to even if she only make $5.

I hope this helps some. I’ll answer whatever else I can.

[Kara]

Great, comprehensive post, Marcy! I was just going to say I plan to simply add a little "corner" of my shop for my daughter. She's looking forward to helping keep track of the shop online so I'll leave that up to her!

Kara