Congratulations on your new venture! I am going to give you answers in reference to your Federal taxes for now. Please check with your state about filing requirements for state purposes. Many states have an annual filing fee whether or not you have income.
For tax purposes you are required to report all income, whether you have a profit of not. If you have losses they will carryover to the following years and offset any future income. Be sure to keep all the receipts of your business expenses.
You will not pay taxes on gifts you receive. Only business income counts as income. My grandkids should be very happy about that! Whatever happy to buying gifts for grandkids? It's Venmo all the way for them.
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