Benefits and pitfalls to Farm Tax ID

[Hobbley_Farm]

A feed store we go to always asks for a Farm Tax ID number. Found out that they are handing sheets out to register for Farm Tax ID numbers. I'm just starting out and spending MUCH more than I get back. The tax break on the feed would be wonderful. What am I missing in regards to any pitfalls? I have NO idea when and IF I would/will ever actually make a profit. Any Ideas?

 

[Hobbley_Farm]

can anyone shed some light on this for me?

 

[fargosmom]

Giving you a bump . . . .
Don't know anything about this but I do know that here in California if you have a resale license and your business is for many people a hobby (such as photography) the resale gives the tax guys a red flag, so you'd better not be using it inappropriately. There may be something similar in your case - you might want to talk to your tax person. Hope you get your answer!

 

[cindyanne1]

The only pitfall would be if you actually are not considered "farm usage," Which means you might have to file a Schedule F with your taxes and put everything on there re: your chickens. Keep all of your receipts and records of any money made from sales of eggs and birds. You might be able to claim all of what you have spent already as a business loss BUT as a PP said, be wary as consistant business losses on what might be considered a "hobby" is something that sends up red flags to the IRS.

We farm for a living and file a schedule F every year.

If you have any questions, just ask!

 

[Hobbley_Farm]

that sounds like it could end up being a huge headache. I think i'll just hold off. thanks everyone