Pel freez and Taxes

[randtrabbitry]

I got my taxes done. And like i always do i go threw my uncle he runs a tax business. Anyway we talked about my new venture pelfreez. Told him i have not decided if i want to make it a business or make it a hobby. He told me if i keep it a hobby it will shrink our amount we get. So i said what about a business and he said the chances of me really making money of rabbits is slim and it will probably shrink or tax returns. So im really depressed right know ive got a headache and i cant sleep. I hate sell out but if its going to take that money away from us which we use for bills and if the kids our us needs anything expensive. So ive been trying to decide what to do. O i hate this.

 

[MaggieJ]

Most hobbies cost money. At least with rabbits, you get something back in meat that you would otherwise have to buy. I can't afford to buy rabbit meat, which is very expensive here, but I can afford to raise it.

 

[Devon's Mom Lauren]

I don't quite understand.. one makes money and pays a certain amount in income tax, the more money you make the more you pay in tax. A hobby is something you spend money on it takes away money from your pocket. A business is something you make money on or you don't, a business allows for more "deductions" for the cost of doing business, a hobby doesn't. So how can both ways shrink what money you "get"? What money are you getting? In Canada sometimes we overpay our taxes throughout the year and get some of it returned, we don't get any "new" money! Seems a business would allow up to a point of getting more of what you already paid back through deductions allowed in business. So I would think you are talking about fees for licenses or registering your business etc. not paying more tax?

 

[PhoenixFarm]

In the US, there are certain deductions one can use for hobbies IF they otherwise qualify to use a 'schedule A' or "long form" as so many people call it. If the rabbits are considered a business, the "Schedule F" would be used(F for farm, as opposed to C for conventional businesses) One can carrry a loss on their C or F for a certain number of years,as long as down the road, you can prove an intent and major attemps to MAKE A PROFIT. The rough part here is this-- if one converts a rabbit to food for their own table, the expenses incurred to raise that animal must be 'recovered' A ton of paperwork in that!!!
In the case of hobbies, expenses UP TO THE AMOUNT OF INCOME may be deducted. For the C and F forms, a person may go 'in the red', reducing their overall income, and permitting a larger refund IF sufficient money was withheld from regular wages. Then, when paying someone to prepare your return, each and every form has a base cost, and each entry on that form has a niggling amount that gets charged, as well.I have seen some tax returns cost more to prepare than the client was getting back...

 

[Devon's Mom Lauren]

You get deductions for... HOBBIES??? Here you have to prove you are NOT a hobby farm in order to claim farm income. Certain "criteria" must be met..... it just boggles the mind..

 

[randtrabbitry]

Ya im depressed over the whole thing im calling my uncle tomorrow to be sure i understand everything. If i do decide to get out i will keep a few does and buck to breed for us to use then breed a few small breeds thinking of getting into mini lops for pets and im wanting to get some small goats to start breeding for the pet market. it will be small so im not going to call it a hobby more like just pets.

 

[Miss M]

You get deductions for... HOBBIES???

If I've got it right, and I've had to look because of my husband's model train hobby, if you make money from your hobby, you have to report it. Because you're reporting it, there are some deductions you can take, but ultimately you are paying taxes on the money you make from your hobby.

We have tried to start businesses several times. The tax, licensing, and insurance laws are so ridiculous that we still don't have our own business. Shay wanted to have a little (LITTLE!) side handyman business. Because of the insurance he would have to get, he would have had to work 20 hours per week at his side business just to break even! He had so many older folks who would ask him to do little things for them, and that's all he wanted to do. :angry:

 

[Jack]

yes,
and as for the insurance, many places bond themselves, a local insurance place usually is willing to do it, it's like 10% held by them/

 

[PhoenixFarm]

You get deductions for... HOBBIES???

If I've got it right, and I've had to look because of my husband's model train hobby, if you make money from your hobby, you have to report it. Because you're reporting it, there are some deductions you can take, but ultimately you are paying taxes on the money you make from your hobby.

We have tried to start businesses several times. The tax, licensing, and insurance laws are so ridiculous that we still don't have our own business. Shay wanted to have a little (LITTLE!) side handyman business. Because of the insurance he would have to get, he would have had to work 20 hours per week at his side business just to break even! He had so many older folks who would ask him to do little things for them, and that's all he wanted to do. :angry:

This is how to start a business using those older folks... Hubby does the work, they buy the parts/supplies themselves. If they wish to 'thank' him with a small monetary donation, then he is that much further ahead of the game. Put those 'thankyous' in a separate account under 'his name DBA OddJob Handyman' When those monies accumulate, they can be put towards other stuff the little business needs, such as a tool or two, the ALWAYS, keep those monies separate, and keep meticulous records, including all mileage, even personal, and exactly what each trip covered-- so yes, start and stop readings of the odometer= house tosupply store, store to work, work to handyman job, handyman job to bank, etcbonding, licensure fees, etc My father started his business using the mileage reimbursement his employer paid him..

Look, this keyboard is an idiot, I hope you can figure out that gobbledygook that just happened-- I can't seem to cut and paste/delete when it behaves like this

anyway, I think you can get the idea from this...

 

[Devon's Mom Lauren]

This is why there is a THRIVING underground economy both in Canada and the US. To be honest RandT does the goverment really have to know what rabbits are finding their way to your personal freezer? How would they know? Sure if you sell to Pelfreeze I guess you would report what you sold but that is real income minus your expenses of course. Who's to say that a doe had a litter of 10 or 8? Do you need a vet cert if a rabbit dies? Rabbits "die' all the time or a dog attacks and so on... As long as you are not claiming for these "losses" then you should be ok!
Here I think your 'income' on a hobby would have to exceed around $500 per month to report it. So by then I think it wouldn't be a hobby anymore..

 

[mountainrabbits]

Ya im depressed over the whole thing im calling my uncle tomorrow to be sure i understand everything. If i do decide to get out i will keep a few does and buck to breed for us to use then breed a few small breeds thinking of getting into mini lops for pets and im wanting to get some small goats to start breeding for the pet market. it will be small so im not going to call it a hobby more like just pets.

I wouldn't report it-especially if you are just breeding for your own table.

 

[Miss M]

I wouldn't report it-especially if you are just breeding for your own table.

Certainly... if you're not selling anything, there's nothing to report. We aren't taxed for production of vegetables for our own use in our backyard gardens (yet)... rabbits should be no different.

This is how to start a business using those older folks... Hubby does the work, they buy the parts/supplies themselves. If they wish to 'thank' him with a small monetary donation, then he is that much further ahead of the game. Put those 'thankyous' in a separate account under 'his name DBA OddJob Handyman' When those monies accumulate, they can be put towards other stuff the little business needs, such as a tool or two, the ALWAYS, keep those monies separate, and keep meticulous records, including all mileage, even personal, and exactly what each trip covered-- so yes, start and stop readings of the odometer= house tosupply store, store to work, work to handyman job, handyman job to bank, etcbonding, licensure fees, etc My father started his business using the mileage reimbursement his employer paid him..

Look, this keyboard is an idiot, I hope you can figure out that gobbledygook that just happened-- I can't seem to cut and paste/delete when it behaves like this

anyway, I think you can get the idea from this...

He did something like that while he was a maintenance man... they'd buy the parts, and he'd do the work. He didn't ask for money, but they would give him some anyway. We reported it on our taxes under "tips".

With the job he has now, he really has no opportunity anymore to open a side business. He drives a thousand miles a week sometimes.

Thank you for the tips, though, they may come in handy down the line. Shay was so deflated that time, though, I don't know that he would even try it again unless something crazy happened, and the IRS was abolished, and so forth. The local, state, and federal governments have made it so difficult for your average Joe to hang out a shingle, it's amazing that anybody starts a business anymore.