While you can accept cash and checks, accepting credit cards will give your customers another option. (And what kind of business doesn’t accept credit cards?)
Personally, I’ll only accept a check from someone if it is a deposit or at least two weeks out from the event. You never know when you might come across a bad check. Luckily, I haven’t.
Using Square is so simple.
The chip reader also supports Apple Pay and Samsung Pay.
There is a special promotion going on with Square right now and if you sign-up through this link, you can process up to $1000 of sales with no processing fees for the first 180 days (that’s 6 months!)
PayPal has something similar. I tried it, but I have found Square to be much more user-friendly.
Note: I am not qualified to answer any of your questions regarding taxes for your home based bakery. Please refer to you local tax representative.