How much cash did you spend last year on your beekeeping hobby? (Edit: I have turned my hobby into a side income/business)
I have over $3500 in receipts and I know I lost track of some of them. All those boxes, lumber, nails, paint, sugar, fencers, saws, etc add up
I went from 6 colonies fall of 09 to 20 in fall of 10
I am working on tax return right now. It looks like I will get about two grand more back from the taxes I paid from my regular income. This is when all expenses and my mileage are added to the the return. If you travel to buy bee equipment, to yard etc, the mileage is deductible. If your equipment supplier is a considerable distance it adds up. You cant deduct your first trip to work so if your yard is five miles and your equipment is 30 go to the yard first and check to make sure the fence working!
I used taxact to get a round idea. I will still use an accountant to make sure I am doing my stuff right.
(Edit: I have not filed my return yet, I still need to meet with my tax accountant so Im not sure what will happen for sure.)
I have spent at least that, especially if you include the cost of bees for 2011 that I have pre-funded. With my business model I have others pay for the equipment to put on their property. They own it and I provide it to them at my cost and I manage their hives turnkey for the year. In return I take a split of bees from each hive (to make 2 nucs) after the flow, and if they ask me to extract their honey for them I keep half the harvest.
I'd be curious to hear others weigh in on whether I am getting or giving a better deal.
If it's a beekeeping hobby, then it can't be used to tax purposes. If you are in a position that you are exercising federal privilege in your beekeeping (or claiming to use federal privileges) then you can claim to be a 'trade or business' and deduct expenses.
Hobbies aren't tax deductable.
I didn't realize beekeeping expenses where tax deductible. I could understand if this was your business but you said
Quote from: bee-nuts on February 27, 2011, 06:51:48 PM.....on your beekeeping hobby?
if that's so, that is great news and wish I would have known it before I filed this year.
Nevermind, Countryboy must have put his post in while I was typing mine out. He answered my concerns.
It would've been nice though.
If you report the income from any honey, wax or bee sales (which you should by law) then beekeeping is a business (even if its part time) and expenses incurred in producing the bee products is deductable. The income and expenses are all reported on a business form.
With a hobby, both income and expenses are reported. Expenses can only be deducted up to the amount of income, but they can be used to offset income from the hobby. Any expenses after that cannot be deducted.
Personally, I made a small profit with my bees, and reported the profit until this year. I have gotten out of most of it now and let the younger folks do it. I mostly mentor now.
File the farm schedule, keep good records because you may trigger an audit Claim depreciation, mileage, all out of pocket expenses, fees and rents you paid; and deduct losses from your gross income. IF you are staying hobbyist you can deduct expenses up to the the break even point. If you lost money you can't claim that but are supposed to claim any profit. It is your job not to pay any taxes you don't owe!
I spent about $1000, and got back about $900 in sales (honey, hive, & bees).
Edited. Better left unsaid.
Edited. Better left not said.
Simply put, if you are going to turn your hobby into a side income, I recommend seeking advice from someone who is familiar with business taxes, codes, etc.
I didn't spend enough. I still need more hive bodies, frames, tops, bottoms, nucs, nails, screws, glue, saw blades, router bits, swarm traps... :-D
I know here in Virginia you can do away with sales taxes if you only use the equipment for agricultural purposes only. May be something the rest of you guys may want to check into. Buying thousands of dollars in equipment doing away with sales taxes can mean buying something else you need.
If you report the income from any honey, wax or bee sales (which you should by law)
The question is if the sales of honey, wax, or bees can legally be classified as 'income' or not. If it actually is income, then yes, it needs reported. If the sales are not income, then it is unwise to call it income just so you can pay a tax on receipts that would otherwise be untaxable.
When you start selling stuff, its income.
That is a legal determination. Are you licensed to practice law?
The Supreme Court ruled that 'all that comes in is not income' which shoots your argument that sales are income.
Use a professional accountant to help you prepare your tax returns.
I have a better idea. Learn the actual law, and to what and whom it applies to. An accountant just knows how to fill out forms - they don't know how to determine if a receipt is income or not. If you don't know whether or not a receipt is income, then odds are, you will erroneously call it income, and end up paying more than the law requires.
Add anything else you think is relevant to the thread.
I went into winter with 42 colonies, ended up with almost 5000 pounds of honey, and didn't have a single dollar of income from my beekeeping endeavors. No need for deductions when I have no tax liability.
I know here in Virginia you can do away with sales taxes if you only use the equipment for agricultural purposes only.
Beekeeping is a form of agriculture known as apiculture.
This is my second year and have two hives. In 2010 I spent about $1,100 including two packages to replace my starved out Italians.
I should have refrained from mentioning anything to do with taxes from this thread when I started it. I had no intention of turning this into a argument over taxes, whats legal, or whats not. I simply thought it would be interesting to share with each other how much we spent on our beekeeping endeavors, whether in legal terms they should be classified as a hobby or a business.
I have decided to turn my hobby into a side income/business and I intend to recover as much of my expenses as I can with the help of an experienced tax accountant. Im sorry if that strikes a nerve with anyone or if anyone feels its wrong. I have my opinion and you, yours.
Thank You
Bee Nuts
Quote from: Humanbeeing on February 28, 2011, 01:38:40 AM
I didn't spend enough. I still need more hive bodies, frames, tops, bottoms, nucs, nails, screws, glue, saw blades, router bits, swarm traps... :-D
LOL BEE HAPPY Jim 134 :)
What argument? I thought it brought out some good info. A very informative thread.
"What argument?"
The one I almost got into about tax law! Ill leave that wide open for you to debate if you find yourself interested.
If you have that much $s invested in Bee Keeping and equipment you may want to look into establishing an LLC. That way you can take advantages of that for Tax and Legal Purposes.
Quote from: bee-nuts on March 01, 2011, 12:02:35 PM
"What argument?"
The one I almost got into about tax law! Ill leave that wide open for you to debate if you find yourself interested.
Hey it happens people get a little restless during winter happens to us all. I actually feel rather flattered that my post was taken up to point out the new beekeeper politial correctness. :-D Starting to think i was invisable around here.
A word of advice on tax law the IRS doesn't even know how to interprate it so you have to just comply the best you can and hope they don't come a knocking. An example of this would be back in 2001 we had a book keeper working for us that messed up on payroll. We worked to fix the problem ended up over paying. Now years later we still haven't got our money back from them and depending on which person you talk to at the IRS we eigther still owe them or they owe us. Go figure if you have a good accountant you should be fine though.
I really like this topic, gives info to people wanting to make a business out of bees.
More than I will ever tell my hubby about. :evil: that's my story and I am sticking to it.. (hey I don't know how much he spent on bass fishing stuff last year but I guarantee the boat alone was 10 times what I spent on the bees.
We have 8 out of our 11 hives still alive over this winter. The three hives we lost all had mice damage in them so it was my stupidity and not the girls fault they didn't make it. My wife and I keep bees just for fun and know we'll never be big enough to do it for a living. We've keep pretty accurate records since we started 7 years ago because we wanted to know when our girls had covered all of the equipment and other expenses. We have enough equipment for 22 hives and most of that was paid for a few years ago when we had two good producing years in a row.
In 2010 we spend about $1250 for replacement packages and more woodenware. We made close to $5000 after all expenses. Even if beekeeping didn't pay for itself it's still a fun hobby for us and it's nice knowing our neighbors and our gardens are probably doing better because of it. It's also nice having a few extra bucks to do improvements around the house.
$1500 approx to increase from 5-6 hives to a dozen, though i had some extra material so i didn't need to buy all new. i also build a good amount -hence save on expenses- and i catch and remove free bees. Actually bee removal is what finance my addiction, allowing me to get more stuff.
Quote from: charmd2 on March 02, 2011, 09:50:32 PM
More than I will ever tell my hubby about. :evil: that's my story and I am sticking to it.. (hey I don't know how much he spent on bass fishing stuff last year but I guarantee the boat alone was 10 times what I spent on the bees.
You and me both, ma'am! I intentionally tried not to keep a record of it to any great extent, but over the whole spring and summer I was at the bee supply place every other week it seemed spending $130-$160 bucks or so. Yikes. Went from 0 to 10 hives at the end of last summer, and even though I built my own boxes and bottom boards, those frames and miscellaneous accessories sure add up quick.
Quote from: Humanbeeing on February 28, 2011, 01:38:40 AM
I didn't spend enough. I still need more hive bodies, frames, tops, bottoms, nucs, nails, screws, glue, saw blades, router bits, swarm traps... :-D
:lau: :lau: :lau:
Ah .. ... . . the joy of nailing together frames , wiring and waxing while siting in your be suit when its 30oc in the shade , ooh what joy :-D
To the lovely sounds that flow out of your mouth :thunder: :evil: :-x :rant: :devilbanana: :hissyfit: :rant: :thunder: :thunder:
mvh edward :-P
Last year was my first year and I got the fever bad so about $1200.00 and got 4 gal of honey not bad anyone want some $300.00 gal honey
Dave
Here is some related info with regards to beekeeping and taxes at beesource if the link works.
http://www.beesource.com/forums/showthread.php?t=251345 (http://www.beesource.com/forums/showthread.php?t=251345)
maybe i should change my handle to bee-taxed
I went LLC 3 years ago as a CYA. I am not putting my personal assets at risk over beekeeping. I'm very careful but if I get sued (for whatever) my beekeeping company is out of business and I'll start another one. I spent $2,291 and brought in $2,262 and I report it on my IRS taxes. I've got my fingers in enough pies that I keep tight records and let the tax professionals handle it. I'm still increasing the number of hives. At the point where I am not increasing and having to purchase as many supplies I do expect to make a little money but at it's core beekeeping is a labor of love. My cost for 2011 will be much higher as I substantially upgraded my extraction equipment.