Chicken Business,Egg business and taxes?

[aoxa]

My husband started selling eggs at his work this winter 6-7 doz a week @ $2 a doz - Great Right? but, according to www.eggzy.net  we are selling at a loss .  We are raising our price per doz as, we don't think we will loose any sales and have more people that want to buy from us. and  I have more chicks ordered, planning to revamp a shed into another coop.  I am seeing our CPA tomorrow to find out if he thinks this is a bussness or a hobby for us. 

I sell mine for $3 - $3.50 a dozen. My dad pays me $5.00 - but I don't even tell him to pay.. he just does. I think I should at least break even with feed costs alone. If I sold my eggs for $2.50 a dozen, I would have to sell all my eggs (average 7 eggs a day x 7 days = 49 eggs /12 = just over 4 doz. @ 2.50 a dozen = $10.00 a week). That would barely cover my feed costs. I do have chickens that are not yet laying, so yeah.. I would be reporting at a loss.

 

[fried green eggs]

At the price we are selling eggs - it covers feed only per month but, not electric to keep water from freezing or other extras. It's just hard to raise price by much when local grocery stores here run $1 a doz sales often. A few of the people buying from us where buying Whole Food eggs so, they know they have been getting a deal.

 

[zstewart123]

In my opinion, which is about worth nothing, If you are having fun at it then its a hobby not a job! J/K

 

[PtldChick]

I don't know of anyone who has a backyard chicken flock that actually makes a profit, once you add in all the expenses like coop, food, power, cost of chicks/chickens, equipment, etc.

As a small business you can only claim a loss for two out of five years, I believe. Personally, I don't think it's worth getting flagged in the IRS system claiming a loss or even a break even. It's a hobby and getting $2-$5 per person for some eggs isn't the kind of money they're looking for. If you tried to claim a loss, they'd probably call it a hobby and say you couldn't do it, so I wouldn't bother.

Even businesses can give employees non-cash awards up to $25 and not report it as employee income.

 

[7L Farm]

Farmers never make a profit trust me. Just ask one,

 

[Hansen4211]

So many conflicting and confusing comments. Lots to think about. We are not even selling eggs yet but are planning on it. I was really interested in what the government expects. I don't want to get into trouble. But If I have to claim income from the eggs then I want to claim the expenses.

 

[Yoke]

Just keep track of your feed and chicken only supplies. If you use any electric heat, you can estimate the cost. It would be up to the IRS to prove that your calculations were wrong (which they will be happy to do).

Anyway, After feed and other hard receipts, your profit should be minimum. For discussion sake, $100 in egg sales, -$75 for feed, and -$15 for wormer leaves you with a $10 profit. You would only pay tax on the $10. If you had other expenses that would cause a loss year after year, just loose some of those receipts and turn a $1.00 profit each year. You would detail all your expenses on a Schedule C for a normal business -- I'm sure there is a different one for "Farm" income.

Yes, the IRS makes it very confusing, resulting in many conflicts. Just be glad you are not a corporation like Ford -- you would need 1,000 accounts just to do your taxes. Maybe we should get rid of the IRS and find a simple easy way to calculate taxes.

 

[duckinnut]

If you are really going to go through all the tax BS, don't forget your start up costs. The initial cost of coop,run,chicks and their feed,feeder,waterer,brooder and any supplies like shavings all factor in. Once you run the numbers you will wanna cry. I sell mine,I do cover costs of everything presently facing me and make a couple bucks and get free eggs. However I would have to do this til they put me in the dirt to really make money.

 

[Hansen4211]

If you are really going to go through all the tax BS, don't forget your start up costs. The initial cost of coop,run,chicks and their feed,feeder,waterer,brooder and any supplies like shavings all factor in. Once you run the numbers you will wanna cry. I sell mine,I do cover costs of everything presently facing me and make a couple bucks and get free eggs. However I would have to do this til they put me in the dirt to really make money.

I am in complete agreeance. Just afraid of the IRS

 

[fried green eggs]

So many conflicting and confusing comments. Lots to think about. We are not even selling eggs yet but are planning on it. I was really interested in what the government expects. I don't want to get into trouble. But If I have to claim income from the eggs then I want to claim the expenses.

I would ask a CPA that knows Farm Tax and Schedule F.