[Rhinox]

I was just wondering, if I sell fish from time to time, if I can write off my tanks and operating costs as a business expense?

Don't know much about the complexities of the tax laws my returns were always simple until I got married. Now my wife has business income and expenses she has to add in for doing private speech therapy. She's not really a business but according to how we understand the law it gets reported as business or other taxable income and she has some expenses to offset some of that but the last 2 years we have ended up owing quite a bit because it is not taxed up front. I was just wondering if anyone knows if my tanks and operating costs can count as business expenses as well to offset some of that taxable income since I have sold some of my fish? I'm not an official business but I do have (minimal) income from the fish sales and lots of fish expenses. Or is that not possible/legal? Anyone know how this works?

 

[BucketHead]

I am in no shape of form a tax person or anything. But I know where I live and many other places you get the cost of what you need for your business taxed written/paid for. Like say a poker pro online would be internet, desk, chair, computer. But I am pretty sure to get consider a business type write up you had to pay your own taxes to gov.. so really dont know if worth it. Depends on tanks, how many fish your really selling(money your making)

 

[Number6]

I fyou want to get a business lic, and aquaculture lic and start up a small biz, go for it... once you have your lic. you can file a tax return and it's all on the up n up.

 

[suds1421]

I'm no accountant but my cousin is. How she has explained it to me is this:

The portion of your personal use items that are used to make a profit can be written off. So for example if you could seperate out your breeding costs (tanks, electricity, water) then you might be able to write it off. However, the food, electricity, water, etc for your display tank is excluded as it is personal use...

It's all interpretation but I use this:

If it's primarily used in my business I write it off, if not, I don't..

 

[Narwhal72]

Don't forget that if you sell more than $600 worth of fish per year you have to report that as income to Uncle Sam and pay taxes on that income (both state and Federal).

 

[Rhinox]

Sounds like its a stretch. I don't want to do anything illegal, I just wasn't sure how it worked.

Number6
You don't have to be a business I.E. if a babysitter makes $1000 for a year of babysitting that is income that is supposed to be reported and taxed. My wife does private speach therapy she does not have a business liscense but she has to report it as income and she is allowed to write off expenses that she had in earning that income. So you don't need to have a business liscense, etc, to report income and writeoff expenses.

suds1421
What if my display tank is my breeding tank

I guess since I'm not specifically running my tank with the purpose of trying to make income then I probably don't get to write it off. I just wasn't sure, since my wife and I file jointly, if the income and expenses from her private speach therapy could get lumped together with the income and expenses of my fishkeeping. I'm pretty sure you're not allowed to report a loss, and if I was only reporting my fishkeeping income and expenses it would be a HUGE loss :lol: . But combined with my wifes private speach therapy and expenses, overall it wouldn't be a loss, just less taxable income.

 

[RRasco]

Don't forget that if you sell more than $600 worth of fish per year you have to report that as income to Uncle Sam and pay taxes on that income (both state and Federal).

That's not true. You are supposed to report any income you make, not just if it was more than $600. The $600 thing comes into play if you are an independent contractor performing work for someone, they must provide you with a 1099-MISC if they pay you more than $600 during the year. If you make $25, you still have to report if, you're just not going to be issued a 1099 for it. Technically, if you steal something through out the year, Uncle Sam wants you to report it. It's considered 'income'.

I guess since I'm not specifically running my tank with the purpose of trying to make income then I probably don't get to write it off. I just wasn't sure, since my wife and I file jointly, if the income and expenses from her private speach therapy could get lumped together with the income and expenses of my fishkeeping. I'm pretty sure you're not allowed to report a loss, and if I was only reporting my fishkeeping income and expenses it would be a HUGE loss :lol: . But combined with my wifes private speach therapy and expenses, overall it wouldn't be a loss, just less taxable income.

Sure you can. You don't have to be a 'business' to report income or claim business expenses. And your business does not have to report a profit. The part of a Schedule C (the form you use to claim business income/expenses) where you report your earnings is actually titled 'Profit or Loss From Business'. Many privately owned businesses have the intent with operating at a loss, or as close to one as possible, because then you don't have to pay taxes on that income but can still reap the benefits of earning a secondary income; like buying more 'business' equipment (i.e. more tanks, fish, supplies). That's for a different discussion though. When claiming expenses, you have to be careful that they are purely for business. If they cross over into a personal aspect, you're not supposed to claim them. There is nothing in there that says you can't enjoy your work though. :thumb:

Addressing the business license aspect of the discussion, what defines a business license? You can establish a business a number of ways. Most commonly, this is done by filing for a doing business as (DBA). A DBA basically allows you to legally operate under a business name. It also allows you to open a business bank account and accept payments under the business name. However, you are 100% responsible for the business' liabilities. You could also register your business as an LLC, a corporation, or a number of other ways. In the end, you don't have to do any of them. You can report miscellaneous income and expenses using your social security number and never worry about any of it.

 

[Number6]

The reason you need an Aquaculture lic. and a business lic. is long and complicated and differs slightly from state to state, but trust me... look into it before you decide that you can try and act like a business AND produce new live animals for sale.
:thumb:

 

[RRasco]

The reason you need an Aquaculture lic. and a business lic. is long and complicated and differs slightly from state to state, but trust me... look into it before you decide that you can try and act like a business AND produce new live animals for sale.
:thumb:

That's another story in itself. Operating as a business is one thing. Operating as a business breeding animals may very well be another. A quick google search tells me #6 knows what he is talking about.

 

[Rhinox]

very interesting information. I'm pretty much tax illiterate my taxes are always simple. Income, standard deduction, rebate or owed. The most complicated it got was when I had to do my student loan interest, until my wife came along and made it complicated

Just out of curiousity, do dog breeders have to regester special for taxes since they produce live animals as a business?

And I guess, I'm not saying I want to operate as an official business, just wodering if it counted as miscellaneous income and expenses reported on the schedule C as RRasco was talking about.

Sounds like its not something I should be doing but it is an interesting conversation anyways

 

[Number6]

Rhinox
right or wrong, there is a list of farm/pet animals and then there is "wildlife".

Dogs are on the pet list...

 

[jrf]

As others have pointed out, claiming the expenses only works if you’re reporting the income. If we could claim fish as dependents, THAT might be worth the extra paperwork. :lol:

 

[Rhinox]

As others have pointed out, claiming the expenses only works if you’re reporting the income. If we could claim fish as dependents, THAT might be worth the extra paperwork. :lol:

Well, in my case the income is ~$50 and the expenses are $1000+ so...

 

[Lestango]

You might want to go to the GCCA forum and post the same question to BaldTaxGuy. The worse he can do is ignore you.

 

[dotbomb]

My tank is an office furnishing for my business. Makes it simple.