william prejean
New member
ok here is an unusual question, what tax deductions can you take in snake buisness?
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corn snake tax deductions
- Thread starter william prejean
- Start date
RobbiesCornField
Bring it on.
I believe you can write off mice as a tax deduction, as well as new snakes (Breeding stock). Don't quote me on that, though. I'm saving all of my receipts, just in case. LOL.
You are a business if you say you are.. (as far as the IRS is concerned- Your city doesn't talk to the IRS, so paying a business license is a separate issue though it could be another write off)
You can't write off most things directly though.. Racks, snakes, heating supplies, water bowls etc are supposed to be depreciated over number of years. I'm depreciating mine over 5 years. Mice are a write off, as are shipping materials, cards etc. Even your membership here is a write off.
The IRS can tell you that your business is actually a hobby and please stop writing schedule C's for it. But you are entitled to show a loss over 3 years (Khaman says 5, I like that number even better, but I think it's three) Shipping you can either write off (but you'd have to add what you charged for shipping to your income if you do it that way) or you can just leave it off on both sides.
As was mentioned it may not help you much. I'd prepare the taxes with and without it, just to see if the difference justifies doing it.
Other point though.. The law actually says that if you make even $20 selling corn snakes, you should have it in your tax return, but you can put your expenses on as well. To me that means you should do it to be in compliance and let them tell you when they want you to stop..:laugh:
Oh yeah, if you do, save all receipts.
If you'd like to see an example of a Schedule C with snake figures in it, send me a PM and I'll shoot you an email later..
You can't write off most things directly though.. Racks, snakes, heating supplies, water bowls etc are supposed to be depreciated over number of years. I'm depreciating mine over 5 years. Mice are a write off, as are shipping materials, cards etc. Even your membership here is a write off.
The IRS can tell you that your business is actually a hobby and please stop writing schedule C's for it. But you are entitled to show a loss over 3 years (Khaman says 5, I like that number even better, but I think it's three) Shipping you can either write off (but you'd have to add what you charged for shipping to your income if you do it that way) or you can just leave it off on both sides.
As was mentioned it may not help you much. I'd prepare the taxes with and without it, just to see if the difference justifies doing it.
Other point though.. The law actually says that if you make even $20 selling corn snakes, you should have it in your tax return, but you can put your expenses on as well. To me that means you should do it to be in compliance and let them tell you when they want you to stop..:laugh:
Oh yeah, if you do, save all receipts.
If you'd like to see an example of a Schedule C with snake figures in it, send me a PM and I'll shoot you an email later..
william prejean
New member
thanks for your answers everyone, yes i would like to see what a sched c looks like, ill pm you
I sent it to him, but if anyone else is interested, let me know I can send the forms to you too..
By the way, the Schedule C and the Depreciation Forms work if you are a sole proprietorship.. If you are an LLC or any other type of Corporation it's a whole other ball of wax... I don't do those types of returns.
By the way, the Schedule C and the Depreciation Forms work if you are a sole proprietorship.. If you are an LLC or any other type of Corporation it's a whole other ball of wax... I don't do those types of returns.
kathylove
Pragmatic & Logical
Yes, you have to decide whether it is to be a hobby or business. If it is a hobby, you are supposed to show all income, and can write off expenses to the extent of your income (I believe that is the difference). If it is a business, you can actually show a loss - for a while, at least. The idea is that you are really trying to make a profit, and eventually will either make a profit or get out of the business.
As a business, (and even as a money generating hobby) there are LOTS of deductions - anything that you need to do to earn a profit. That includes mileage to get to where ever you need to go - shows, FedEx, office supply stores, to customers or suppliers, anywhere that is required to do business. You can also claim show expenses such as food and motels, if you sell or buy at the shows, and it is part of your business. And, of course, any required permits, licenses, etc. It is true that some big equipment type purchases will have to be taken over many years. But a certain amount of even those costs can be taken ("expensed", I think they call it) in the first year - ask your accountant about that. You can also deduct not only the actual cost of the animals, food, and supplies, but also electricity, phone, and other needed expenses. However, if you don't have a separate building with its own electric meter, and a separate phone line, it can get tricky to partition personal vs business use. It can still be done, but it can trigger red flags for audit, so I suggest using an accountant. My CPA figures all this stuff out (and he makes WAY more $$ than I do - his is the business to be in for profits, lol!), so I only know how to do the bookkeeping to give to him, and he puts it in order and fills out the proper forms.
Although it is really difficult to be profitable in this business (especially in this down economy), there are real tax advantages to doing it as a part time side business, and trying to make a small profit so that you can deduct a lot of expenses that you might incur as a hobby anyway. Just talk to a good accountant to be sure you are on the right track, and not likely to trigger any unnecessary audits.
As a business, (and even as a money generating hobby) there are LOTS of deductions - anything that you need to do to earn a profit. That includes mileage to get to where ever you need to go - shows, FedEx, office supply stores, to customers or suppliers, anywhere that is required to do business. You can also claim show expenses such as food and motels, if you sell or buy at the shows, and it is part of your business. And, of course, any required permits, licenses, etc. It is true that some big equipment type purchases will have to be taken over many years. But a certain amount of even those costs can be taken ("expensed", I think they call it) in the first year - ask your accountant about that. You can also deduct not only the actual cost of the animals, food, and supplies, but also electricity, phone, and other needed expenses. However, if you don't have a separate building with its own electric meter, and a separate phone line, it can get tricky to partition personal vs business use. It can still be done, but it can trigger red flags for audit, so I suggest using an accountant. My CPA figures all this stuff out (and he makes WAY more $$ than I do - his is the business to be in for profits, lol!), so I only know how to do the bookkeeping to give to him, and he puts it in order and fills out the proper forms.
Although it is really difficult to be profitable in this business (especially in this down economy), there are real tax advantages to doing it as a part time side business, and trying to make a small profit so that you can deduct a lot of expenses that you might incur as a hobby anyway. Just talk to a good accountant to be sure you are on the right track, and not likely to trigger any unnecessary audits.
wade
Save The Humans
Kathy brings up a good point. You want to give this some thought before you bring yourself to the attention of the government. If you are going to claim the deductions, you have to also claim the income. Don’t forget about state and local taxes that may apply. If you are selling snakes you will probably need a city business license and may have to pay state sales tax. If you have a company name like Wades Weptiles and Wodents, you will need to get an assumed name permit and register it with the state.
Once you have done all of this you may have put up a red flag for the IRS to come and audit all of your financial records. I know deducting part of your home and telephone for business is a red flag. In my business I can deduct the expenses for my trucks and some cars but only if they have signs on them for the business. And I have to keep a log of the mileage and be able to show where each vehicle went during the year.
You may be opening a bigger can of worms than you had intended.
Once you have done all of this you may have put up a red flag for the IRS to come and audit all of your financial records. I know deducting part of your home and telephone for business is a red flag. In my business I can deduct the expenses for my trucks and some cars but only if they have signs on them for the business. And I have to keep a log of the mileage and be able to show where each vehicle went during the year.
You may be opening a bigger can of worms than you had intended.
kathylove
Pragmatic & Logical
In Florida, you only have to get a fictitious name if the business does not include your own name. For example, if my business is Kathy Love's Cornutopia, then I won't need one. But just Cornutopia will. But each state is different, so you have to check. A good accountant can probably help you a lot in getting started the right way. They have to deal with a lot of different business issues.
But the most concern could be zoning laws. You could REALLY open a can of worms if your zoning dept doesn't like what you do. You might want to inquire anonymously, in case they are troublesome, and you want to just go on as you are, without bringing any new heavy-handed government interest in your hobby / business.
And don't forget insurance. Your home insurance company may have a problem with just pet reptiles, let alone doing it as a business. So just keep in mind that others with power over you may not be as tolerant of your "weird" hobby as your pals are. Always leave yourself an "out" (such as, use a friend's , or pay phone, and don't tell them who you are) when dealing with those in power, in case you want to just leave things as they are.
Remember, you aren't paranoid if they really ARE out to get you, lol!
But the most concern could be zoning laws. You could REALLY open a can of worms if your zoning dept doesn't like what you do. You might want to inquire anonymously, in case they are troublesome, and you want to just go on as you are, without bringing any new heavy-handed government interest in your hobby / business.
And don't forget insurance. Your home insurance company may have a problem with just pet reptiles, let alone doing it as a business. So just keep in mind that others with power over you may not be as tolerant of your "weird" hobby as your pals are. Always leave yourself an "out" (such as, use a friend's , or pay phone, and don't tell them who you are) when dealing with those in power, in case you want to just leave things as they are.
Remember, you aren't paranoid if they really ARE out to get you, lol!
All good points and all true! I do take the percentage of the home used (including that percentage of rent and bills) but it's not much like 3' by 10'. I don't worry so much about the flags it sends up. They may tell me I can't do it anymore, but between their perspective and mine, it's all honest, so I can't see them disallowing the deductions past, as long as I REALLY keep good records. I don't have anything to fear from an audit. Luckily my dad's been doing taxes for over 30 years, I'm working for him and learning, lol. I still check everything by him before I do it.
On the 'business use of home' part, Dad is not a big fan of doing that if you own the home, but does suggest it if you rent. I can't remember the reason why- something about how it affects you when you go to sell the home down the road..
Naturally, all of this is presupposing that it's true- I would never suggest trying to get over if not, that's fraud and it sure is a can of worms..
On the 'business use of home' part, Dad is not a big fan of doing that if you own the home, but does suggest it if you rent. I can't remember the reason why- something about how it affects you when you go to sell the home down the road..
Naturally, all of this is presupposing that it's true- I would never suggest trying to get over if not, that's fraud and it sure is a can of worms..
:shrugs: Depends on what you have on your older records I suppose, but I would never suggest to my clients that they pay more tax than they are supposed to. You can't be penalized for following the rules.
OK, I've been thinking about this, and I thought I should add the following: Be careful with your taxes, talk to your accountant or tax professional and make sure you're comfortable with what you're doing.. Remember, however it winds up, it's each of us personally that have to pay the piper!
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