Home bakers and cottage food businesses: books, sales tax and taxes done for you

Free tax review

Find out what we’d handle and what it costs

Thirty minutes by phone; you leave with one written price.

Each month we keep the books, record every Venmo, Zelle, card and cash sale, track what ingredients and packaging cost, and at year end we prepare the return. Bookkeeping starts at $375 a month, quoted as a flat fee in writing before we start. Based in Santa Clarita, we work with home bakers and cottage food businesses in any state.

Every Venmo and cash sale recorded Flour, butter, jars and packaging in the cost of what you sell A current total of the year’s sales Taxable and exempt sales kept apart

Typical situations

Do you work with home bakers and cottage food businesses like me?

Yes, we take on home bakers and cottage food businesses who sell from home, at farmers’ markets, online and to cafés — paid in cash, Venmo, Zelle or by card.

A sourdough micro-bakery at the Saturday market

The bakery sells loaves at a Saturday farmers’ market and by Instagram message, paid in Venmo and cash. Nothing ties the cash box and the Venmo history to the orders, so the year’s sales get pieced together from memory at tax time. We match every Venmo payment and deposit to an order or a market day and log the cash from the market tallies. Monthly bookkeeping from $375 a month — see what the books include. Read: reporting baked goods sold from home.

A custom cake decorator with wedding deposits

The decorator takes wedding orders with deposits months ahead, buys ingredients and cake toppers on a personal card and delivers the cakes. The deposits never get matched to the cakes they pay for, and the supply runs never reach the books. We pull the topper and ingredient purchases off the personal card statement each month, record each deposit against its order, keep decoration and delivery charges on their own lines, and code ingredients and packaging as the cost of what was sold.

A baker selling to cafés

The baker holds California’s Class B cottage food permit, the kind that allows selling through shops and cafés, and sells loaves to two cafés on invoice and the rest at a weekend market. The café checks arrive weeks after the invoices, the market cash goes straight to groceries, and the spreadsheet never matches the bank. At return time we tie each café invoice to its check and log the market cash from the day’s tally, even when it’s spent before it reaches the bank. The return alone from $650, or from $850 for an LLC or S-corp with the owner’s personal return included — how we prepare the return.

A home baker nearing the annual sales limit

Sales come through two apps, a card reader and cash, and the year’s total creeps toward the annual cottage food sales limit. Nobody knows the year’s total until the year is over. We keep a running total of gross sales from every channel, month by month, so the owner sees where the year stands; we don’t file the cottage food registration or permit.

A baker hiring a holiday helper

A helper comes on for the holiday rush and is paid in cash at the end of each shift. No W-9 is on file and nothing gets filed at year end. We log each shift’s cash pay from the pay records, get a signed W-9 (the form with the worker’s name and taxpayer ID) from a helper paid as a contractor, before the first payment for anyone new, and file the 1099-NEC, the year-end form for a contractor you paid, when one is due. For a helper on payroll, we run the payroll and file the W-2. Payroll from $95 a month — how the payroll service runs.

A baker two years behind

Two years of market tallies and ingredient receipts sit in a shoebox, the Venmo history has never been downloaded, and no return has been filed. We rebuild each year from the app histories, tallies and receipts, then prepare both returns from the rebuilt books. Cleanup from $750 — how a cleanup project runs.

Sales tax

Do California home bakers charge sales tax on baked goods?

In California, bread, cookies, cakes, jam and candy sold to go are generally not taxed, because the state counts them as food products, and neither are sales to a café or caterer that resells them.

What is taxable: food eaten where you sell it (a paid cake tasting, tables at your booth), anything sold inside an event that charges admission, sodas and other carbonated drinks, a hot drink sold with a pastry at one price, cutting and serving a cake at the customer’s venue, and non-edible cake decorations priced on their own — we keep those sales on their own lines. A baker who sells only exempt food generally needs no seller’s permit — California’s sales tax registration — and a baker who makes taxable sales needs one, which is free; we go through what you sell and where on the first call.

We keep taxable and exempt sales apart in the books, and if you hold a permit, we file the sales tax returns on the schedule the state assigns.

More on selling at markets and events: how sales tax works at markets and events. And if the baking is headed for a truck, cart or stand, see how we handle food truck books and sales tax.

Ingredients and the kitchen

Can a home baker deduct ingredients, packaging and the kitchen?

Ingredients, and packaging that’s part of the product, like the jar a jam is sold in, are deductible as cost of goods sold (what went into the goods you sold), reported in Part III of Schedule C, the business page of your personal return. A kitchen that also cooks family meals generally isn’t deductible.

Each month we code ingredient and packaging receipts to cost of goods sold and shipping boxes to shipping, and take out the flour, butter and eggs that went to family meals. We agree with you whether to count what’s on hand at year end or deduct ingredients as the baked goods go to customers, and we keep that method every year.

A kitchen shared with family meals fails the IRS’s exclusive-use test — the space has to be used only for the business — so we don’t claim it. A separate storage space used regularly for your baked goods can qualify when your home is the business’s only fixed location; we check each condition first.

Read: which ingredient and packaging receipts to keep.

Catch-up work

What does a catch-up look like when a home baker’s books are behind?

A catch-up rebuilds the missing months from your bank, Venmo, Zelle and card-reader histories, order records and ingredient receipts, then prepares the return from the rebuilt numbers — a cleanup project from $750, with the return quoted alongside it.

What we ask for

The Venmo, Zelle and card-reader histories; your order records — website, Instagram or text orders, market-day tallies, invoices to cafés; ingredient and packaging receipts; and the bank and card statements. Last year’s return, if there is one.

How the cleanup runs

We match each deposit and app payment to an order, a market day or a café invoice. We log the cash sales from the order records and market tallies, code the ingredient and packaging receipts, and match helper payments to the payroll records or the W-9s on file.

What you get

The rebuilt year and the return prepared from it. From then on, quarterly estimates — the tax payments made four times a year — are figured from the reconciled numbers.

Cleanup is billed half to start and the balance on delivery — see what the cleanup includes and how it’s billed.

The monthly close

What do you check every month?

Each month we tie every Venmo, Zelle and card payout and every deposit to the bank, log the cash from each day’s tally, and code every receipt before the books close.

Venmo, Zelle and card-reader totals tied to the bank
Market-day cash logged from each day’s tally
Café invoices matched to the checks that pay them
Ingredient and packaging receipts coded to cost of goods sold
Ingredients pulled for family meals taken out of purchases
Card-reader fees coded as fees, not netted against sales
Helper pay records and the W-9s behind them
Transfers between your own accounts marked, so they aren’t taxed as sales
The year’s running sales total updated from every channel

Each month you get the P&L — the profit and loss statement — the balance sheet and a short note on what needs attention. Here’s what the monthly bookkeeping includes.

California

What’s different for a home baker in California?

Beyond sales tax, California adds the cottage food law, with its two classes and annual sales limits, and, in the City of Los Angeles, a business tax registration.

The cottage food law. A Class A operation — one of the two kinds of cottage food operation — sells only directly to customers, from home, at bake sales and farmers’ markets, by phone or online, and registers with the local environmental health department; a Class B operation can also sell through shops, cafés and restaurants and gets a permit after an inspection. The 2026 limits Public Health published are $88,878 in gross annual sales for Class A and $177,756 for Class B, adjusted each January for inflation; in Los Angeles County, the county’s Department of Public Health registers and permits. We keep the year’s sales total from every channel in the books, so you can see where the year stands.
City business tax. Inside the City of Los Angeles, home-based businesses register for the City’s business tax, and so do bakers based outside the City who sell inside it, at a market in the City for example, seven days or more in a year. With $100,000 or less of prior-year worldwide gross receipts the tax is zero — but only for a registered business that renews on time. Our books give you the prior-year gross receipts figure the City’s renewal asks for.

Pricing

What does bookkeeping and tax help cost a home baker in 2026?

In 2026, bookkeeping for a home baker starts at $375 a month, payroll at $95 a month, the return alone at $650 for a Schedule C or $850 for an LLC or S-corp with the owner’s personal return included, and a cleanup at $750. W-2 and 1099 filing on their own, without monthly books, starts at $95. Each is a flat fee quoted in writing before we start.

Recording app and cash sales, the running sales total, ingredient and packaging coding and — in the books-plus-the-return tier — the quarterly estimate figures sit inside the quote; there’s no separate charge for them. What moves a quote: how many places you sell — home, markets and events, online, cafés — how customers pay, whether any sales are taxable and a seller’s permit is involved, a helper on payroll, accounts and cards, and how far behind the books are. The quote is the price.

Books

from $375/mo

Every Venmo, Zelle, card and cash sale recorded
Flour, butter, jars and packaging coded to cost of goods sold
The year’s running sales total
Monthly P&L and a short note

Payroll

from $95/mo

A helper on payroll
Pay stubs
The quarterly and year-end payroll returns

The return alone

from $650

Schedule C from your records, cost of goods sold in Part III
From $850 for an LLC or S-corp — the owner’s personal return included
How we prepare the return

Book my free 30-minute call

How it works

What happens after you book?

After you book, the free 30-minute call comes first, and the engagement letter is sent during it.

The 30-minute call

What you sell and where, how customers pay, whether anyone helps you bake, what you spend on ingredients and packaging, and how far behind the books are. It ends with one flat price for the work we’d take on, in writing before we start.

The engagement letter

Sent during the call and signed when you’re ready. Signing books a short onboarding call; the secure-portal invite comes from that call, with a short checklist so nothing is missed.

Access and documents

Through the secure portal we take read-only bank feeds or the QuickBooks file, plus the Venmo, Zelle, Cash App and card-reader histories and your order records.

Behind first, then monthly

If the books are behind, the cleanup comes first, then the first monthly close.

You see the return before it’s filed

Half the return fee starts the work, and the balance is due before e-file. The draft comes to you first, and an extension is free if April gets tight.

Communication

Who do you reach when you call?

The person who answers the phone is on the same team that closes your month and prepares your return.

The same-day rule

Call or email during business hours and you’ll hear back the same day — all twelve months.

Home bakers are welcome

A porch pickup fridge or a full wedding-cake calendar, one market a month or every weekend — the free call ends with a straight answer on whether we’re the right fit.

Admitted to practice before the IRS

Our team of IRS representation specialists is admitted to practice before the IRS. If an IRS letter shows up — a notice saying your income doesn’t match a form, for example — forward it: how we handle IRS letters.

The N&T Tax & Advisory Group team

For a home baker, we keep the books, run payroll for a helper and prepare the return from the same numbers — and we’re reachable all year.

Bookkeeping · Tax preparation · Tax planning · IRS representation · Direct line: (661) 554-4495

Reviews

Rated 5.0 on Google

★★★★★ Twelve reviews, every one five stars, every one verifiable. Read all of them on Google →

"Alex helped me resolve a complicated tax situation that had been causing me a lot of stress. He was extremely knowledgeable, responsive, and efficient throughout the entire process."

Kevin B. — via Google

"Working with Alex was straightforward. I hadn't looked at my books all year, but he made my life easy and handled the whole profit and loss at the end of the year so I could get my taxes done."

Levon B. — via Google

"I came to this company with previous tax years and bookkeeping that were done incorrectly. They're very knowledgeable about what they do and help me get everything in order at a very reasonable price."

Sayra A. — via Google

Where we work

Do you work with home bakers and cottage food businesses outside California?

Yes — we work with home bakers and cottage food businesses remotely in any state. Documents move through the secure portal, and the monthly report goes over a call or a screen share. If you work in another state, we work to that state’s payroll and filing rules and price it into your quote.

Anywhere in the US Santa Clarita Los Angeles San Fernando Valley

What we don’t do

We handle the money and tax side: the books, the return, quarterly estimates, sales tax returns and payroll. We don’t file the cottage food registration or permit, and food safety, labeling, health permits, business licenses, insurance, pricing your baked goods, contracts, worker-status decisions and legal advice are outside our work — as are reviewed, compiled or audited statements.

Worth reading

What can you read before you call?

Short articles from our blog for a home baker — markets, quarterly payments and paying a helper.

Markets

I paid a helper in cash. Do I have to send a 1099?

FAQ

What should a home baker ask before booking?

Do I have to report Venmo, Zelle and cash sales if I don’t get a 1099-K?

Yes — every sale is reportable whether or not a 1099-K arrives. A 1099-K, the form a payment app or marketplace files to report what it paid you, is a platform’s filing rule: the line for filing one is payments to you over $20,000 and more than 200 transactions in a year. We tie the app histories and market tallies to the bank each month, so every sale makes it onto the return.

Do I need a seller’s permit to sell baked goods at a farmers’ market?

In California, a baker who sells only baked goods, jam or candy to go generally needs no seller’s permit, because those sales aren’t taxed. Once something taxable is sold — sodas, food sold inside an event that charges admission, food eaten at tables you set up at the booth — a permit is needed, it’s free, and each event location is registered too. We ask what you sell and where before saying either way, and any taxable sales are kept apart in the books.

What do I need before I pay someone who helps me bake?

If the helper is paid as a contractor, you need a signed W-9, the form that gives you the worker’s name and taxpayer ID, before the first payment; a helper on payroll is set up through payroll instead. A helper paid as a contractor $2,000 or more in 2026 gets a 1099-NEC — the year-end form a business files for a contractor it paid — due February 1, 2027; a helper that is a corporation generally doesn’t get one. In California, a helper who bakes, decorates or packs your products is presumed to be your employee unless every condition of the state’s three-part test for treating a worker as a contractor (the ABC test) is met. If the helper belongs on payroll, we set it up and run it; when the status is unclear, we tell you the case needs an employment attorney.

Do I owe self-employment tax and quarterly payments on my baking income?

Yes, once your net earnings from self-employment, roughly your profit after ingredients, packaging and other costs, reach $400, you owe self-employment tax, the Social Security and Medicare tax on self-employed earnings. Quarterly estimates are how that tax and your income tax get paid during the year; the last 2026 payment is due January 15, 2027. We figure each quarter’s payment from the closed books.

My books are a year behind. Can you catch them up?

Yes — a cleanup project from $750 rebuilds the year from the Venmo history you download, the shoebox of market tallies and ingredient receipts, and the bank statements. The return, quoted alongside the cleanup, is prepared from the rebuilt books, so every number on it ties back to a record.

Should a home bakery be an LLC or an S-corp?

Whether a home bakery should be an LLC or an S-corp comes down to how you want the business taxed: an S-corp is a tax election an LLC can also make, and a California LLC owes the $800 annual tax. We model both on your figures before you form or elect anything — our entity-selection page shows how the comparison runs.

Ready to hand off the books and the return?

One free 30-minute call. You’ll leave knowing what we’d handle and what it costs — whether or not you hire us.