Tax records

[Quaillover1953]

Hello everyone, Could anyone tell me what we need to keep as far as what if anything we need for tax purposes. We thought we would be too small for it to be a problem( like under three hundred birds a year) but we have pasted that. Are there different rules for every state? This assuming that Uncle Sam has his finger in the Pot. Where can I find out. H&r Block was no help. She thought I was crazy.   Quaillover1953

[Reeves]

Don't know what the States laws are....but my wee tiny "hobby farm" sure has a huge write off each year   

 

[Quaillover1953]

Thank you  Reeves. Guess I'll just keep everything. Quaillover1953

[Pheasant Hollow Farm]

I suggest that you get yourself a CPA. Tax issues either on a state level as far as sales tax or on an income level as well as the Federal level is more of a personal thing.

Steve
Pheasant Hollow Farm

[Quaillover1953]

Thank you Steve

[Pheasant Hollow Farm]

Thank you Steve

I am not trying to sound harsh, but each state has their own tax laws regarding income tax and sales tax revenue. The Federal tax laws are the same no matter how you look at it.

You don't go to a plumber for advice on knee surgery. If you feel that you may get audited either at the state level, or the Federal level, I strongly suggest a reputable licensed CPA.

If you have never claimed anything, never filed as business within your state, and never applied for and received a State sales tax exemption certificate, or business license, within your State, or collected any Sales Tax receipts for your State, I wouldn't worry about it. You should be in the class or category of a hobbyist.

If you do have any of the above, then get a reputable licensed CPA.


Steve
Pheasant Hollow Farm

[Quaillover1953]

I appreciate any and all advice, I didn't take it as being harsh. Thanks for your help. I just didn't want to have to explain to the Irs that I'm a dummy some where down the road.  With feed prices going thru the roof, it may not be do able for us so we want to start small and see. We didn't intend to be one of the big boys, just have some fun amd enjoy the birds.  Quaillover1953

[Pheasant Hollow Farm]

I appreciate any and all advice, I didn't take it as being harsh. Thanks for your help. I just didn't want to have to explain to the Irs that I'm a dummy some where down the road.  With feed prices going thru the roof, it may not be do able for us so we want to start small and see. We didn't intend to be one of the big boys, just have some fun amd enjoy the birds.  Quaillover1953

Just a quick thought. I don't know your location, or the size of your property/farm.......but since you mentioned you raise chickens.

Re: The rising cost of feed!
Feed will probably go thru the roof in the next few months in our area because the flood ruined  about 85 percent of the crops by the time waters out of fields, it will be too  late to replant. Corn prices jumps around up and down every week we get feed. The mill grinds the grain for us and we buy small amounts of bulk. We have 150 layering hens. And now trying to raise a few Quail( which I know nothing about). Chickens I can do.But these little burgersare real different. I've never had a chick jump out of the incubator on me and the adults were alot stronger than I was ready for..

........Why not fill a business license with your state, and under type of business if their is a code available for farming/agriculture, use that. Then the business license would enable you to file for a tax exemption with you feed store. This way you don't get hit with the sales tax, and usually wouldn't have to collect sales tax receipts for the state either under agriculture.

The way I look at it, if you are not showing any profit after all your expenses, it would be considered as a hobby. Just put the quail under poultry if you are not licensed with your states DNR.

Steve
Pheasant Hollow Farm

[Muleshoe]

I would open a separate bank account for this business. Keep all documents related to the purchase/sell of items. Also keep minutes of meeting you have with your advisers, classes attended, etc. Depending on your level of other income, you can be subject to the hobby loss rules. Which basically say that unless you have a business purpose, IE make a profit  it is a hobby and losses are then only deductible to the extent of income. A rule of thumb to prove a business purpose is a profit within five years.

Check on the IRS website for publications relating to farms, farming or hobby losses. I would "Google" hobby losses.