Starting a business

[KIDDSBANTAMS]

I have a question on starting a breeder business.
Would you choose to stay cash only with no business or tax ties or in order to use the available cost write offs and maintain a business license, would you build your business with paying sales tax and business tax. This would protect you if you were to be visited by the state boys should someone complain about traffic on their road.

 

[perolane]

Cash only with no tax or business ties would classify as a hobby & there would be no write-offs or license.

 

[njduck]

if you are selling a farm product, there is no sales tax. So it would be smart to be legit. the only tax you have to pay is income tax. However you get all the write offs which lower your income. It is a tricky game in which it is good to have a good person to do your taxes. remember everythng from feed, livestock, out buildings, coops, computer, phone all has a write-off value.

 

[perolane]

Quote:
Being "legit" is the ONLY way you'll get all listed above by njduck.

 

[KIDDSBANTAMS]

Now the question comes as to how to get legit.. We're in Alabama, Home of the Forrest GummmmPPPP

 

[emmalynn]

Check out your chamber of commerce site for your city.

 

[Whispering Winds]

Quote:
Absolutely. I have a fantastic tax guy, and everything he does is legit, just he knows HOW to do it right and make it all balance in the end. Even your utilities can be charged off to a certain extent in %, and if you have a small area in your home, where you keep all your business supplies, etc., you can charge it off too. . .ask some of your friends who have self businesses and see who they recommend. There is no better advertising than word of mouth, and they will lead you in the right direction. If you loose some of the flock, that is a loss too, so keep track of their value and what you would have been able to profit off of them, minus their keep. It's amazing how much can be used, and its just a great feeling to know that Uncle Sam didn't get that buck!!! Hee hee.

 

[Avalon1984]

I am not sure how it is with all farms but as a horse breeding business you need to show a profit after at least 7 years, so whatever your plans are, make sure there will be a profit in the end somewhere or the IRS will get suspicious and consider your business a hobby, not a business. You also need to show/prove how you are out there trying to make money (farmers market, website, etc.) A friend of mine lost her "business" status because of some of those reasons and because she called her foals "babies". This is the big reason why we couldn't become a business with the horses, there was not much profit to be made, just tons of costs and most people will not give you a receipt since they run their business under the table (hay, farrier, sawdust). Just my experience.

 

[debilorrah]

Be thankful you aren't in CA. We get the priviledge of paying $800 a year just to have a business name.