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Great question! Let me break this into two parts: sales tax and income tax.

Sales Tax / Vendor's License
In Ohio, most food sold for human consumption is exempt from sales tax, and homemade baked goods typically fall under that exemption. So in most cases, you *don't* need a vendor's license for cottage food sales. That said, if you ever expand into non-food items or taxable goods, that changes. I'd recommend doing a quick double-check with the Ohio Department of Taxation (or your county auditor) just to confirm your specific products qualify as exempt.

Income Tax
Yes, your earnings go on your personal tax return, but it's not quite as simple as just adding them to your income. As a sole proprietor, you'll report your baked goods income (and expenses!) on Schedule C. The net profit from that flows onto your 1040 as self-employment income.

A couple of things to know:
- You'll owe self-employment tax (15.3%) on your net profit, on top of regular income tax
- If you expect to owe more than $1,000 in taxes for the year, the IRS wants you to pay quarterly estimated taxes, so not monthly, and not just at year-end

The good news: you can deduct business expenses like ingredients, packaging, and equipment to reduce that taxable profit.