taxes

[sixshooterfarm]

Ok, so, how do you guys get your deductions from your taxes? You keep receipts, keep very accurate records of everything you bought and how much. So what all do you guys deduct, blankets halters feed farrier work vet stuff like that? the more info the better please help to get me off to a good start for 2006! Thanks guys

 

[Miniv]

If you are planning to file as if your farm is a business? The first thing you need to do is......

FIND A TAX ACCOUNTANT! :bgrin

From there you will need to divide your expenses up into catagories - which your accountant can help with.

Things like -- Horse Purchases, Horse Sales, Feed, Medical Supplies, Vet Expenses, Supplies, Advertising, etc. There are a HUGE range of things to consider, some are partially deductable, some are depreciated. That's why an accountant is good to hire.

MA

 

[sixshooterfarm]

There is an accountant that i will be going to ina week or so , she is familiar with small farm business accounts, so she will definently get me started the right way, plus she is a freind of the family so thats good! I am just thinking that since we are spending the money(a lot of it) and we are wanting to get into these minis full bore as soon as we find a house to buy that is, then we better do it the right way from the very beginning. Any more info you would like to spare. How about medical insurance for your horse, have you heard of it and do you do it? thanks miniv

 

[Marty]

Well it sure didn't work over here. We tried that a few times and every time it came out to make no difference in our year end results were the same. Oh darn it.

 

[justaboutgeese]

Here in Canada life is a bit simpler with the tax man. First is a reasonable expectation of profit. A hard bill to fill with minis on the go. I would venture only a small portion of forum members actually run minis as anything more than a hobby.

 

[nootka]

miniv has some great advice.

We are self employed (Commercial Fishing) and it is very similar to farming in many ways, so we know what's what and it's complicated and a person could get themselves into some serious trouble by mistake.

We have both corporate and personal income w/our current setup and it's well worth the money for the accountant.

Start out on the right foot and hire some help to get you started.

Good luck!

Liz M.

 

[kaykay]

we insure about 4 horses here with gencorp. the premiums are deductable. marty i cant believe it doesnt make a diff in your bottom line. Are you depreciating your horses, equipment barn etc?? all my horses are depreciated using the 7 year method.

 

[Bess Kelly]

Our minis were put into an S-Corp from beginning and ran as a business, CPA & all. The Corporation was the actual owner of the minis and we had to file additional paperwork with the registries for these purposes. There is an IRS booklet on small farms that may help. Yes, horses can be depreciated if breeding stock, equipment also. Your foals are not immediately depreciated and buy/sell figures can be affected dramatically by the depreciation. You have expenses that can be deducted, need receipts and records. You need to show business plans, have expectations of income and IRS looks for you to make a profit at some point. We elected to pay sales taxes on our feed, supplies, etc, to eliminate the need for annual audits on such from the State for a tax-free status. Some states require sales taxes to be collected on sales of animals, in VA it is so -- unless breeding stock

:

You will need to keep details of your OWN time involved with the minis and the "operation" of this business. As a functional business almost everything can be considered on the tax return. Our cash input was set up as loans to the Corp...but, we did make a profit on the farm business

: We also had other animals to include in all of this....Boer goats, mini donks.

Since you already have an accountant selected, I believe you need to sit and have a meeting with her to get an outline of the very best way to get this "set-up" from the beginning. Like Nootka says, you can get into a mess without knowing it until it is toooo late. And keep records. I have calendars from the early '90's with records of when we gave shots, did farrier work, all mares breeding dates, foaling notes, went to shows, meetings, clinics, buying trips, went for feed, hay, mowed fields, fertilized, etc., etc. , filed with my boxes of receipts, corporate minutes, and so on. Think of your life as a daily "diary". :lol: