Do you report egg/poultry sales as income on your taxes?

[bwalden]

My wife ask if we are supposed to report any income we make off of hatching egg and or chicken sales when we file our taxes. ?? Anyone have thoughts or knowledge of this?

 

[lazy gardener]

by the time you deduct your costs for all of your supplies including feed, bedding, housing for the birds, cost of the birds, I think you can even count your mileage, but you'd have to check on that. etc, etc, etc... have you actually gained any profit? I'm not an accountant, but I'd want to do the homework before I gave SAM any money he's not entitled to.

 

[mdbtalon]

Yes you are "supposed to" report that income on your returns. Expenses can be deducted as well.....If treating this as a hobby income though you will likely end up with a situation where only a part of the expenses can be deducted. If you operate this as a business rather than hobby income then you can fully deduct all expenses.... but the IRS expects after 2 to 3 years you will be earning a "reasonable profit" and if you do not they will likely start treating it as hobby income which has the different rules. In either case when you have "business income" with little to no profit it is kind of like begging the IRS to audit you.

So in other words the little guy really gets screwed over by the IRS assuming you report everything to the letter of the law. So by law you are obligated to report this income. Whether a person chooses to do so is probably another question.

 

[bwalden]

Thanks for the replies. I have not really turned any kind of profit. After I have built 3 large coops and 3 large runs, I know I will never recoup any of that. I do sell hatching eggs and the occasional bird. My wife works for a bank and they have auditors all the time (just part of banking) and she worries about my hobby getting us into trouble if we don't report the income. I guess we will talk to our income tax preparation person and see what they think if we should or not.

 

[gabrielle1976]

I think they consider anything where you make under 500 a year or so not worth reporting , I didnt have to report my little paper route I had once becuase I made like 500 a year and once I deducted the fact that I had to buy bags and rubber bands and gas milage it was well under any kind of limit. So unless your makeing a good profit after expenses I wouldnt think so but Im not a accountant and I dont know the rules so you may want to go to an account and ask them about IF you started saleing cicks for a profit what income would be considerd enough to report ect and see what they have to say ??

 

[bwalden]

I think they consider anything where you make under 500 a year or so not worth reporting , I didnt have to report my little paper route I had once becuase I made like 500 a year and once I deducted the fact that I had to buy bags and rubber bands and gas milage it was well under any kind of limit. So unless your makeing a good profit after expenses I wouldnt think so but Im not a accountant and I dont know the rules so you may want to go to an account and ask them about IF you started saleing cicks for a profit what income would be considerd enough to report ect and see what they have to say ??

Yeah that's what I was thinking if it's under a certain dollar amount than you dont have to claim it. Guess I will find out.

 

[Bobaroni]

I do taxes for a living. You are supposed to report ALL income to the IRS if you are required to file. You will file a schedule F if it is a agricultural venture. On this schedule you will show expenses and income. If it is not a business venture but a hobby you will show the income as other income and expenses will not be allowed as deductions. If you are filing a schedule F you want to make sure that you have sales of at least maybe a hundred bucks, you need to have a business plan in place and be able to prove a profit motive in case you were audited. Your sales minus the expenses will be the taxable amount. If it is a loss the amount will be deducted and reflected in you adjusted gross income. If the agricultural endeavor is your sole source of income and your net earnings were less than 400 dollars you are not required to file. But if it is a sideline and you have a regular job which you made more than $9,500 you are required to file and would therefore be required to report the income whether it was $25.00 or $25,000.00. As far as I know there is NO policy of the IRS that there is any income "not worth reporting" however the IRS does allow mistakes of up to 10 bucks.

 

[bwalden]

I do taxes for a living. You are supposed to report ALL income to the IRS if you are required to file. You will file a schedule F if it is a agricultural venture. On this schedule you will show expenses and income. If it is not a business venture but a hobby you will show the income as other income and expenses will not be allowed as deductions. If you are filing a schedule F you want to make sure that you have sales of at least maybe a hundred bucks, you need to have a business plan in place and be able to prove a profit motive in case you were audited. Your sales minus the expenses will be the taxable amount. If it is a loss the amount will be deducted and reflected in you adjusted gross income. If the agricultural endeavor is your sole source of income and your net earnings were less than 400 dollars you are not required to file. But if it is a sideline and you have a regular job which you made more than $9,500 you are required to file and would therefore be required to report the income whether it was $25.00 or $25,000.00. As far as I know there is NO policy of the IRS that there is any income "not worth reporting" however the IRS does allow mistakes of up to 10 bucks.

Thanks Bobaroni! I was hoping a tax person would be on BYC. I know how I need to proceed now. Thank you for taking the time to provide that information.

 

[CaraDD]

I only "barter" for eggs and chickens. No cash passes between us at all.

 

[mdbtalon]

I only "barter" for eggs and chickens. No cash passes between us at all.

As far as the IRS is concerned the passing of cash is irrelevant to whether it is income. If you are selling eggs as a side business even if "bartering" and not taking cash then that is income that must be reported.

I am not suggesting the majority of people in that situation would report it, but clarifying that legally the fact that you barter rather than get cash does nothing other than complicate the tax situation should you choose to report it(because you have to come up with values for the bartered goods).