A person I know (we're becoming friends) wants me to bake a dozen cupcakes to bring to a luncheon to celebrate the birthday of an attendee at that luncheon. I asked about when I could come over to bake it since I don't have a commercial kitchen (I am licensed and insured as a personal chef).

She wants me to bake the cuppies in my home and wants to "reimburse" me $20.00 for my ingredients and a tip--I have no problem with the price as it would have been what I'd charge her anyway with a "friend discount." I'll be making vanilla bean cupcakes with cherry BC.

I'm pretty sure she wants a receipt because she'll count this as a business expense related to the luncheon.

How can I word the receipt so as to NOT get myself in any kind of *business* hot water? We don't have a formal contract, just an agreement. I was thinking "Received of (name) for consideration of one dozen cupcakes, the amount of $20.00."

I guess it's kinda like baking stuff for the church if you're going to get reimbursed for your materials and they give you a little extra for your time and trouble too.

Thanks!
Fabric Gal

You could do a simple reimbursement form/invoice with your name and address, just make NO mention of your business. This is pretty standard. I'm an accounting manager for a small business and I'm lucky if I can get any receipts for reimbursements for the boys that work in my company. Lol, you should be fine

I don't get it. If it is not legal for you to bake them, then do it for free or don't do it at all. It sounds like what you are asking is how to not leave a paper trail.

You have three options:

1. Don't charge for the cupcakes
2. Charge for the cupcakes but insist on an under the table payment with no paper trail
3. Charge for the cupcakes and provide an invoice

Option 1 is perfectly legal and not risky at all. Option 2 is illegal but very low risk. Option 3 is illegal and much more risky. Personally I would chose option 1, $20 isn't worth the risk (especially since you won't be insured for options 2 and 3), and the recipient would owe you a favor.

It is my opinion... obviously many people work with out licenses, insurance, and paying taxes. But it is another thing to ask how to circumvent the law on a public forum. These questions are usually saved for private conversation.

My opinion is if she wants to charge it to the business, then I would think she would need a business name or contractor name.....but I'm not an accountant. I think it depends on the business too - I got reimbursed from a company I worked for once for a cake...but I don't know that they actually put it "in the books"....I don't really know if that was illegal, but at the time I didn't think it was.

What if she just went out and bought you the supplies? Even if you end up with extra supplies than what you need for the order, bartering is perfectly acceptable. AND she can use the receipt from whatever she purchased as her reimbursement receipt.

yeah i agree with Kali. just let her but the ingredients then she'll have a proper receipt for her tax purposes. this way there is no issue with what is legal and what is not.

Bartering for supplies is still considered accepting compensation, so if you want to keep the risk as low as possible make sure there is no paper trail between you and the customer (i.e. do not leave any business cards, do not give the customer an invoice, and make sure the customer doesn't mention your business name to others).

I think the safest bet (As you have clearly stated you ARE allowed to bake in other poeples homes and such as a personal chef), you could have her purchase the ingredients, she will have her receipt, and can claim that expense. The other option, is to provide her with your receipt for the ingredients, she can reimburse you for the cost of the reciept, and still claim the reciept. This way, everything is legal, you are out no money, and she can claim her expense.
If she wants to give you a tip to claim as an expense, I would assume (and I could be wrong), that you can provide her with an invoice for cooking in her house, as you have stated you are allowed to cook as a personal chef. Than she can claim everything, and no-one should get in trouble.

The bartering counts as compensation, but only if receipts are exchanged. Otherwise, it's just "a friend buying me the stuff to make her some cupcakes". So from the bakery side, it's just you making cupcakes at home for personal use (to give to a friend). And your friend has the original receipts, so that's what she uses to turn in to her company. Does that make sense? I haven't had my normal amount of coffee today, so my wording may be a bit off lol

Before I started baking, I touched base with the person who wanted to "hire" me for making the cuppies and I brought up the topic of a receipt. I said I couldn't give her a receipt because I was not using a commercial kitchen or doing the baking in her home. I said that if she wanted to reimburse me for the materials and decorations, I'd appreciate it.

I left it open for her to decide. I was willing to make the cuppies and not get paid because I decided I didn't want to jeopardize my business. She paid me $20 cash and all was well.

The cuppies were vanilla creme with tinted-pink cherry buttercream frosting. All of them had a whole cherry inside the cuppie, and they all had a stemmed maraschino cherry on top. Six were decorated with "pearls" and six were decorated with silver dragees. They were in darling heart-motif cuppie papers and were boxed beautifully in two different boxes.

Thank you all for your input, help, info and insight!