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Started By
Message
Tax deductions, new business
Posted on 12/14/19 at 6:15 am
Posted on 12/14/19 at 6:15 am
This year, I spent 4-5k on starting a dog training/breeding business: 2 new dogs (male and female), educational resources (books and online application), training materials, testing genetics, vet bills, dog food, etc.
It’s not a huge amount of money and is more at the hobby level at this point, but I do plan to continue to grow the business via adding more dogs and starting to participate in hunt tests/ field trials in 2020 which can be pricey especially with travel.
As for 2019, are these expenses tax deductible?
How would I file if so?
Any advise is appreciated.
Also, I think my wife will let me buy more shite if she knows I can deduct.
It’s not a huge amount of money and is more at the hobby level at this point, but I do plan to continue to grow the business via adding more dogs and starting to participate in hunt tests/ field trials in 2020 which can be pricey especially with travel.
As for 2019, are these expenses tax deductible?
How would I file if so?
Any advise is appreciated.
Also, I think my wife will let me buy more shite if she knows I can deduct.
4
Posted on 12/14/19 at 6:53 am to Rougaroux
quote:
dog training/breeding business:
You need a CPA
Posted on 12/14/19 at 6:55 am to Rougaroux
First off, you need to understand the term ‘right off’ is an amateur term. You didn’t use it but don’t. An expense is an expense of doing business.
Did you have business income? If not I’d think it would be harder to have expenses for a hobby but certainly not impossible.
The first thing you need to do is create a separate bank account for this if it’s a serious business. Pay for everything out of that account for your business.
Did you have business income? If not I’d think it would be harder to have expenses for a hobby but certainly not impossible.
The first thing you need to do is create a separate bank account for this if it’s a serious business. Pay for everything out of that account for your business.
Posted on 12/14/19 at 7:04 am to baldona
No income. Basically I have 2 puppies at this point.
I am in the process of training them for hunt test competition for proof of concept.
I appreciate the input about the bank account.
I am in the process of training them for hunt test competition for proof of concept.
I appreciate the input about the bank account.
Posted on 12/14/19 at 7:10 am to Rougaroux
Do you have a business license?
Do you have customers?
Get a CPA.
When I started my business I had “people” telling me all sorts of nonsense. They said, “you can write off everything!” This is patently untrue. You have to show a meaningful business purpose to the expense.
The easiest way to show that you have a business is to have a business license and customer receipts. Preferably more than one customer.
Also I am just a guy in a message board. Not an expert on tax deductions.
Do you have customers?
Get a CPA.
When I started my business I had “people” telling me all sorts of nonsense. They said, “you can write off everything!” This is patently untrue. You have to show a meaningful business purpose to the expense.
The easiest way to show that you have a business is to have a business license and customer receipts. Preferably more than one customer.
Also I am just a guy in a message board. Not an expert on tax deductions.
Posted on 12/14/19 at 7:15 am to HailToTheChiz
quote:
You need a CPA
I do use a CPA. I am hoping to gain some pointers so I sound smarter when I talk to him.
Posted on 12/14/19 at 7:16 am to makersmark1
quote:
When I started my business I had “people” telling me all sorts of nonsense. They said, “you can write off everything!” This is patently untrue. You have to show a meaningful business purpose to the expense.
The easiest way to show that you have a business is to have a business license and customer receipts. Preferably more than one customer.
Also I am just a guy in a message board. Not an expert on tax deductions.
This is good stuff. Thank you.
Posted on 12/14/19 at 7:45 am to Rougaroux
I’m a complete novice, but the first thing my husband did was to set up an LLC and a business account at the bank. It’s made it easy to keep track of income and expenses for the business.
Posted on 12/15/19 at 11:36 am to Rougaroux
quote:
It’s not a huge amount of money and is more at the hobby level at this point,
Do you plan to operate it as a business? Will you have income and show a profit in the next year or two?
quote:
As for 2019, are these expenses tax deductible
It depends how aggressive you want to be. You stated it is a hobby at this point but want to grow the business in the future. If you will have income from the business in 2020, you could perhaps make an argument that it was a business in 2019.
quote:
How would I file if so?
Assuming you have no partners and have not applied for a separate EIN for the business as a partnership or corporation, you would just file on Schedule C on your personal 1040 as your business is disregarded from you personally in the eyes of the IRS.
quote:
Also, I think my wife will let me buy more shite if she knows I can deduct.
The expenses have to be for business purposes to be a valid deduction. You cannot just deduct anything and you will get fricked pretty good upon audit if you try to run personal stuff through your business.
We have had several clients get torched upon audit for doing this.
Posted on 12/15/19 at 12:17 pm to Rougaroux
quote:
more at the hobby level at this point
quote:
As for 2019, are these expenses tax deductible?
By your own words it's still a hobby so the answer is no.
quote:
but I do plan to continue to grow the business via adding more dogs and starting to participate in hunt tests/ field trials in 2020 which can be pricey especially with travel.
I'm not seeing the word clients or customers in here so no, still not a business.
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