For centuries, jewelry has been a key way to showcase your status to society. From elaborate headdresses to pearl necklaces to designer timepieces, people have always used these accessories to show off while feeling beautiful. Collectors love to get their hands on timeless items or pieces of jewelry with intrinsic value. New designers also have a lot of fun creating original accessories that can be personalized for everyone to love. As styles change, there’s so much room for explorers to enjoy creating new items that will wow the market.
If you love jewelry, you may be interested in selling some of your own pieces or gaining resale value from things you’ve owned forever. Get creative and have fun making your own jewelry or refurbishing nice items for collectors. If you plan to make a big profit off of this, you may need to consider some of the legalities that may be involved. Because jewelry can often be an expensive asset, there may be situations where you are required to pay taxes after a big sale. Let’s dive deeper to answer your questions about taxes and your blossoming jewelry business.
Know what jewelry brand or niche you want to sell.
Before you can answer the question about your taxes, you need to know what jewelry you’re looking to sell. If you’re creating your own pieces that you sell for a few dollars here and there, you may not have to worry about huge taxes on that retail price. However, if you’re looking to sell high-class jewelry that is seen as a status symbol, you may end up paying a bit more in taxes.
A huge niche for jewelry is designer wristwatches. These offer the perfect combination of style and functionality for professionals and future generations. Rolex is a top brand that can be a great option for your jewelry selling. Get in on the ground floor to offer new watches from the Rolex collection to catch the eye of your consumers. This will also mean making big sales and therefore owing a bit of money on those capital gains.
Reselling jewelry may involve a capital gains tax.
Depending on the jewelry you own or sell, the government may see those products as major assets for you. Just like a house or vehicle, an expensive piece of jewelry is seen as a part of your net worth. Therefore, if you sell those possessions, you’ll end up owing some money in capital gains taxes. Consult a financial planner or professional to see what you may owe depending on the value of that specific piece of jewelry.
What will you owe if you create and sell jewelry as a business?
Perhaps you are more interested in the creative side of the jewelry business rather than worrying about resale. If you plan to open your own jewelry store or sell customized pieces, you’ll end up being taxed as a business. You can even go the extra mile and register as an LLC just to be sure you’re doing everything by the book. This will be more beneficial if you plan on creating a full-scale business. If you simply make a few bracelets on the side or like to create earrings for your good friends, this may not be a necessary step.
Learn about the tax code and know your situation.
Information is key when it comes to taxes and financial responsibilities. The more you know, the more you’ll be able to prepare for whatever your situation requires. Consider taking a few self-study CPE courses to understand the tax code better, or consult with a financial planner who can master your specific situation. This will help you get all the exact answers you need for your situation.