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Author Topic: taxes and beekeeping  (Read 43342 times)

Offline tbrinck

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taxes and beekeeping
« on: February 26, 2013, 09:56:56 pm »
So I'm starting this year with two hives. I'm keeping all recipts for everything bought. i was wondering if anybit of what i bought could be written off on taxes? Also at what point would i start recording sales from honey, creams etc.. on taxes? I read somewhere you only record if the profit is higher than expenses. Also would i need a buisness license to sell at farmers markets and such?

Thanks
tyler

Offline AllenF

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Re: taxes and beekeeping
« Reply #1 on: February 26, 2013, 10:02:47 pm »
Are you running it as a business or a hobby?   I can tell you that I do not make any money in all my farming activities.  It is so hard to keep up with cash sales anyways.   

Moots

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Re: taxes and beekeeping
« Reply #2 on: February 26, 2013, 10:07:56 pm »
Tyler,
No doubt, this is going to be state specific, if not local government specific.  I'm in Louisiana and already have an LLC set up for a rental property.  I'm expensing everything through my LLC for the tax advantage.  Needless to say, I'll have to claim all sales because of that.  That's a trade off I was comfortable with knowing my expenses would outweigh my income for the foreseeable future, if not for ever.  My rental property will keep my bottom line in positive territory, so I don't have to worry about Uncle Sam freaking out because I'm always showing a loss.

I also assumed this meant I would have to collect sales tax.  However, after talking to the local tax office, they said that I would be considered a farmer and therefore was exempt from having to collect sales tax.   :)

Offline tbrinck

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Re: taxes and beekeeping
« Reply #3 on: February 26, 2013, 10:15:06 pm »
I was just planning on selling honey and body creams made from propolis,wax etc.. primarly at local events such as a farmers market. was not sure if that would automatically make it a buisness or not.

Moots

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Re: taxes and beekeeping
« Reply #4 on: February 26, 2013, 10:25:02 pm »
I was just planning on selling honey and body creams made from propolis,wax etc.. primarly at local events such as a farmers market. was not sure if that would automatically make it a buisness or not.

"Technically" I would think any sales are suppose to be claimed.  In reality, I'm sure there are many that handle it on a cash basis and don't report it.

I think the real problem is if you try to have the best of both worlds, if you're not planning on claiming the income, I'd forget any idea of writing off expenses.

I can't see much chance of a problem if you doing it out your house.  Setting up at a farmers market may or may not complicate the issue.  I'd check with someone else that sells at the market or inquire with who ever runs it as to how most folks handle this.

Offline Joe D

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Re: taxes and beekeeping
« Reply #5 on: February 27, 2013, 02:10:46 am »
Check with IRS FEDs and State, some will classify it as a hobby until you make so much money.  So can't claim losses while getting started.  I used to raise, train and sell registered Coonhounds. That's what they told me the first years when I was getting started.  With kennels, runs, dogs and vet bills, so I figured if I can't claim loss to start with why should I claim a profit latter.
When I sell the little amount of honey that I do sell the money goes back into upkeep anyway.



Joe

Offline Michael Bush

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Re: taxes and beekeeping
« Reply #6 on: February 27, 2013, 12:03:36 pm »
If you sell anything it's income.  If you have expenses to put against those sales you will decrease your income... if you take a loss to many times the IRS starts insisting it's a hobby...
My website:  bushfarms.com/bees.htm en espanol: bushfarms.com/es_bees.htm  auf deutsche: bushfarms.com/de_bees.htm  em portugues:  bushfarms.com/pt_bees.htm
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Offline bluegrass

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Re: taxes and beekeeping
« Reply #7 on: March 04, 2013, 06:40:01 pm »
With the IRS you have to declare income even if it is only a single jar of honey. You can declare as a business or a hobby, but you better be able to prove intent to turn a profit if you declare as a business.

For example: if you spend $600.00 on two hives and sell 4.00 worth of honey and declare as a business you can deduct the cost of the hives and show a net loss. On the other hand if you declare as a hobby you pay taxes on the $4.00 and the $600.00 doesn't change that liability.

If you declare as a business with the same hives and don't have advertising expenses, separate checking accounts etc... they can accuse you of wrongfully filing as a business and then there are penalties. With two hives it is doubtful that they would see you as a business. So to be safe I would declare as a hobby, in which case the hives usually are not deductible.
Sugarbush Bees

Offline johng

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Re: taxes and beekeeping
« Reply #8 on: March 09, 2013, 04:28:42 pm »
You are supposed to  claim the money as hobby income you can claim the expenses to lower the income back down to $0. So there is no taxable income but, you can't claim a loss on hobby income. If its a business you can claim a loss for the first few years. That's the way I understand it.

Offline AliciaH

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Re: taxes and beekeeping
« Reply #9 on: March 13, 2013, 02:24:50 pm »
First, talk to your accountant.  If you don't have one, ask around and find one that you can pay a small consultation fee to for advice.  You need specifics not only for your state, but maybe for your city if you live within city boundaries.  Your accountant may recommend sole propriatorship, LLC, or maybe even just using a Form-F.

Keep all the expenses and income for this activity separate from your household stuff.  Any muddling will nullify your ability to provide proof that you're trying to build a business.

As for farmer's markets, be sure to check into that very carefully.  I know our markets here charge a high fee for booth space, making it too costly for the small beekeeper.  Also, some markets even have expanded requirements for the facilities you should be using to make your products, regardless of local farm produce regulations.  This, too, may add to your costs.  Word of mouth is great...and free!

Offline RC

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Re: taxes and beekeeping
« Reply #10 on: March 13, 2013, 04:16:33 pm »
If you make enough honey to sell, sell it to individuals for CASH, put it in your pocket and keep your tater trap shut.
The less you involve the Government in anything, the better you'll be in the long run.

Offline RHBee

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Re: taxes and beekeeping
« Reply #11 on: March 13, 2013, 04:36:00 pm »
If you make enough honey to sell, sell it to individuals for CASH, put it in your pocket and keep your tater trap shut.
The less you involve the Government in anything, the better you'll be in the long run.
+1, I like the way this guy thinks.
Later,
Ray

Offline greg755

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Re: taxes and beekeeping
« Reply #12 on: April 16, 2013, 05:50:59 pm »
Technically, whether state or local you can only deduct expenses if you are a business.  With that being said, you dont HAVE to make a profit to deduct your expenses, but eventually the IRS will audit you if you continue to deduct expenses and you dont show a profit.  At that time they will tell you that this is in fact a hobby and you do not qualify for deductions...  I found this out one day in an audit.   Doing all cash sales and not reporting income is all well and good until you get caught.  Keep in mind that if they decide to audit you, they can request up to seven years of records...  What ever you do NEVER collect sales tax unless you file with the state.

Best advice is be above board.  Get a DBA, get a federal EIN number and open up an account strictly for the business.

Offline Satch

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Re: taxes and beekeeping
« Reply #13 on: July 19, 2013, 10:43:44 am »
If you make enough honey to sell, sell it to individuals for CASH, put it in your pocket and keep your tater trap shut.
The less you involve the Government in anything, the better you'll be in the long run.
+1, I like the way this guy thinks.

I'm not a big gov't guy, but let me know how you like your SS and Medicare checks with everyone working for cash.

Don't like the system but do believe in everybody doing their part.

Offline deknow

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Re: taxes and beekeeping
« Reply #14 on: July 20, 2013, 08:41:28 am »
The whole point of an llc is to keep assets separate so that being sued for one thing (by a tennant for rental relatwd issues) doesnt put you other stuff (like the house you live in) in jepordy.

Putting some hives (a relatively small investment with some real risks of being sued) under the same umbrulla as your rental property seems foolish to me.  Someone who feels damaged by your bees/beekeeping....and the lawyer that will work for a percetage of the judgment....will look at a potential law suit and see some realestate that is owned by the same entity that is respinsible for the hives.
The goal should be to make the bee business have no assets worth someone going after...it seems to me that you have made suing your llc for bee related damages very attractive and profotable.

Deknow


Tyler,
No doubt, this is going to be state specific, if not local government specific.  I'm in Louisiana and already have an LLC set up for a rental property.  I'm expensing everything through my LLC for the tax advantage.  Needless to say, I'll have to claim all sales because of that.  That's a trade off I was comfortable with knowing my expenses would outweigh my income for the foreseeable future, if not for ever.  My rental property will keep my bottom line in positive territory, so I don't have to worry about Uncle Sam freaking out because I'm always showing a loss.

I also assumed this meant I would have to collect sales tax.  However, after talking to the local tax office, they said that I would be considered a farmer and therefore was exempt from having to collect sales tax.   :)


Offline alfred

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Re: taxes and beekeeping
« Reply #15 on: July 20, 2013, 11:09:51 am »
But it would make sense to LLC the bee business separately so that your personal assets aren't on the line. Right?

Alfred

Offline Santa Caras

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Re: taxes and beekeeping
« Reply #16 on: August 23, 2013, 04:21:06 pm »
If you make enough honey to sell, sell it to individuals for CASH, put it in your pocket and keep your tater trap shut.
The less you involve the Government in anything, the better you'll be in the long run.
+1, I like the way this guy thinks.

I'm not a big gov't guy, but let me know how you like your SS and Medicare checks with everyone working for cash.

Don't like the system but do believe in everybody doing their part.
I'm sure they get enough from us in taxes in our everyday jobs that the small amount made from a few hives isnt going to be funding big government projects like Obamacare or something. If I didnt feel that they'd be giving it away to some country that didnt need it, I'd feel better about paying more in taxes. I'm with the other guy..... leave Big Brother out of it unless going big.

Offline Modenacart

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Re: taxes and beekeeping
« Reply #17 on: August 23, 2013, 04:29:35 pm »
Doesn't really seem fair if some people pay taxes and some don't.

Moots

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Re: taxes and beekeeping
« Reply #18 on: August 23, 2013, 04:48:40 pm »
Doesn't really seem fair if some people pay taxes and some don't.

FAIR is a place you go to ride rides and eat cotton candy!  :-D  Few things in life, if any, are FAIR...and you probably pretty safe putting taxes at or near the top of that list.  :laugh:


Offline Santa Caras

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Re: taxes and beekeeping
« Reply #19 on: August 23, 2013, 05:04:22 pm »
Doesn't really seem fair if some people pay taxes and some don't.
Not to steal the thread.....but if it makes you sleep better at night then by all means...go right ahead. I've been paying taxes since I was 12 years old (what other entity than the federal government would take money from a 12 year old making $22 a week? HUH?) for a total of 45 years now and I have yet to collect a penny in return. Nope, I wont lose any sleep for the couple dollars I keep from some foreign czars coffers.

Offline Modenacart

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taxes and beekeeping
« Reply #20 on: August 23, 2013, 06:29:56 pm »
It does make sense for everyone else to pay taxes. Besides, they have more.

All theses roads and schools pay for themselves.

Offline LizardKing

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Re: taxes and beekeeping
« Reply #21 on: March 12, 2014, 03:03:13 pm »
Doesn't really seem fair if some people pay taxes and some don't.
Not to steal the thread.....but if it makes you sleep better at night then by all means...go right ahead. I've been paying taxes since I was 12 years old (what other entity than the federal government would take money from a 12 year old making $22 a week? HUH?) for a total of 45 years now and I have yet to collect a penny in return. Nope, I wont lose any sleep for the couple dollars I keep from some foreign czars coffers.

Shall we enumerate the numbers of citizens who receive money while not paying anything into the system?
How about all the non-citizens who receive lots of money and services for nothing?
Then, I'd like to go over the amount of taxes the "truly rich people club" in this country pay in taxes, of which
our leaders are members, and the benefits and services those people receive from our current system.

With regards to our foreign budget, half of THAT money goes to a single country that is illegal
to boycott by the consumer.
Other countries that consider our country "the enemy" also receive lots of money and benefits.

Then, we can get to the people like you who have paid into the system all their life, but like myself,
who have had things like sickness strike them and are denied the benefits of the 15% of their paycheck
taken from them their whole life by the government.

So, sell a few jars of honey and pay the taxes on it but just know in advance that you will be in an elite
group of less than half a dozen people in the country doing so out of almost 400 million.

In my dealings with the system and government I have been on the bad side of justice and wronged so often that
to balance the scales of justice I'd have to start outright throat slitting a few people
a day to even start tipping scales of justice in the direction of "fairness".

Offline Walt Starr

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Re: taxes and beekeeping
« Reply #22 on: July 13, 2014, 10:06:07 pm »
Just a note on hobbies and taxes. Losses one year in a hobby can be applied to another year where your hobby may actually present a profit that would otherwise be taxable, even though it is from a hobby. Consult a tax professional for more information.

Offline SkipS

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Re: taxes and beekeeping
« Reply #23 on: August 09, 2014, 01:11:36 pm »
If you make enough honey to sell, sell it to individuals for CASH, put it in your pocket and keep your tater trap shut.
The less you involve the Government in anything, the better you'll be in the long run.

I agree 100%

Offline Eric Bosworth

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Re: taxes and beekeeping
« Reply #24 on: June 26, 2015, 02:20:56 pm »
If you make enough honey to sell, sell it to individuals for CASH, put it in your pocket and keep your tater trap shut.
The less you involve the Government in anything, the better you'll be in the long run.

I agree 100%

Always do everything in cash, don't keep any records and if you get audited just say well I destroyed all the records just like Lois Learner...
All political power comes from the barrel of a gun. The communist party must command all the guns; that way, no guns can ever be used to command the party. ---Mao Tse Tung

Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote. ---Benjamin Franklin

Offline skydiver

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Re: taxes and beekeeping
« Reply #25 on: December 25, 2015, 11:38:48 am »
If you believe the feds are honest with there moneys they steal from us citizens then be honest with them.  :angry:  Just look at Social Security!!!!!!!!!!!!

Offline superbee

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Re: taxes and beekeeping
« Reply #26 on: December 28, 2015, 12:01:37 am »
You may want to consider keeping good records and doing everything on the up and up.  I use my beekeeping expenses as a deduction against my wife's income.  I also get a farm deduction on my CA sales tax.  For example I order all my beekeeping equipment with a bureau of equalization partial tax exemption form and it gets me about a 5% deduction.  For the first couple of years it does not add up to much but if you fall in love with a bug and go big the records will help. 

Offline KeyLargoBees

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Re: taxes and beekeeping
« Reply #27 on: December 30, 2015, 02:36:22 pm »
Quote
Always do everything in cash, don't keep any records and if you get audited just say well I destroyed all the records just like Lois Learner...

Or you can state you kept all receipts in your e-mail files...and those were hosted on Hillary's server  :cool:
Jeff Wingate

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Offline tycrnp

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Re: taxes and beekeeping
« Reply #28 on: May 08, 2017, 11:20:17 am »
I don't know if this forum is more informative or more entertaining, but either way I love it.   :smile:
Thanks!

Offline Captain776

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Re: taxes and beekeeping
« Reply #29 on: May 09, 2017, 04:37:17 am »
For the minimum amount, you are likely to make.........just put it in your pocket and enjoy..........beat them at their own game.
If you put the money back in the business, as you most likely will, it is not income..........you are just turning money new nto honey
Bought my first NUC April 7, 2016.
Like all you when you first started, I am fascinated with beginning Beekeeping and trying to learn all I can.
I retired May 2015 and have added this to my short list of hobbies.

Offline Captain776

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Re: taxes and beekeeping
« Reply #30 on: May 11, 2017, 03:00:10 am »
Quote
Always do everything in cash, don't keep any records and if you get audited just say well I destroyed all the records just like Lois Learner...

Or you can state you kept all receipts in your e-mail files...and those were hosted on Hillary's server  :cool:

thats my defense, I e mailed it to Hillary
Bought my first NUC April 7, 2016.
Like all you when you first started, I am fascinated with beginning Beekeeping and trying to learn all I can.
I retired May 2015 and have added this to my short list of hobbies.

Offline Haveuseen1?

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Re: taxes and beekeeping
« Reply #31 on: March 15, 2019, 04:36:23 pm »
I would guess if you are a business and selling then you may also need State/County/City licenses.