Beekping Accounting

[Andrew Dewey]

Anyone know of a good reference for how to properly account for a beekeeping operation? I have an ok knowledge of small business/non-profit bookkeeping but the agricultural aspects are new to me. For example: Is a colony of bees valued separately from the wooden ware in which they reside? And what sort of an asset are they? (aside from fragile!) Are replacement queens expensed or added to the basis of the colony? How do you account for a replacement queen killed in the cage?

Many Thanks in advance.

[gmcharlie]

darn bookeepers...... your makeing it too hard....... Quickbooks is easy....


Keep track of money spent on
equipment. livestock and travel

And income..... those 3 catagories are all you need for any tax accountant.

eqipment can be depreciated, livestock and feed are expenses, and travel can be a tax catagory.

[Andrew Dewey]

Thanks GMCHARLIE for your reply. I understand about keeping it simple. However, I worked this past spring completing Tax Forms for people and I was appalled by a few clients who sold cosmetics and the like and were not aware that they needed to report the income or even that they were running a business! I will complete my books as a hobby this year - my expenses easily exceed income - but I hope next year to significantly expand. And I want to be smart about it. And only give unto Caesar that which belongs to him.

[Aram]

Why a hobby? Your intention is to build it as an income generating business. If after five years the expenses still exceed income you might question your conscience. Until then... deduct. I think you're already planning to give Caesar more than his share.

[Ian]

>>For example: Is a colony of bees valued separately from the wooden ware in which they reside?

No, value the hive with bees in it as a complete unit, described as a livestock purchases, supers should be kept separate and described as equipment purchases,

>>And what sort of an asset are they?

Livestock


>>Are replacement queens expensed or added to the basis of the colony? How do you account for a replacement queen killed in the cage?

The hive is valued with a queen.
To replace the queen is a cost and is added as an expense to the operation.

It is important you separate the purchases of hives and equipment from the expenses you incur running your operation. Livestock and equipment purchases are entered as capital purchases to which their cost is accounted for through Capital Cost Allowance. All your running expenses are all accounted for in the year they incur.

Now I am speaking from a different country, but I assume our system and yours basically operate with the same kind of principles

[randydrivesabus]

Andrew-go consult a CPA for tax issues...consult beekeepers for bee issues. Find a CPA who has experience doing tax returns for farmers.

[Beeslave]

Money in and Money out. All expenses are not in a broad category. Tools, clothing, fuel, repair, supplies, office, electric, rent, on and on. Talk to a good accountant and the extra you have to spend on him will be returned considerably compared to money in money out accountants!

[Countryboy]

Why a hobby? Your intention is to build it as an income generating business.

I think you're already planning to give Caesar more than his share.

Caesar does not tax hobbies. If you make the legal determination it meets the Internal Revenue Code statutory requirements to be classified as a 'business' that has 'income' Caesar will tax you - even if you don't meet the statutory requirements. If you claim it is 'income' (even if it's not) then you have to pay Caesar.

I think you're already planning to give Caesar more than YOUR fair share.

Like the Supreme Court said - the 16th Amendment gave the government no new powers of taxation, and all that comes in is NOT 'income'.

The Income tax is an excise tax on federal privilege. It is NOT a tax on ordinary private sector fiscal receipts. www.losthorizons.com

[gmcharlie]

FYI, the wife is a tax accountant CPA.......



Candians pay taxes?? according to the news Canada has free health care and is perfect, didn't know you guys had to pay in also:eek:



try cash... harder to trace....

[Countryboy]

Now I am speaking from a different country, but I assume our system and yours basically operate with the same kind of principles

Here in America, direct taxes are prohibited unless apportioned to the states. Excise taxes (taxes on privilege) is how the government gets their money here.

Does Canada have direct taxes?

[Ian]

>>Candians pay taxes?? according to the news Canada has free health care and is perfect, didn't know you guys had to pay in also

Ha, ;)
Who do you think pays for that free health care?

>>Does Canada have direct taxes?

I am not familiar with "direct taxes"
We pay income tax, income generated off any service provided, simply put.

Like Charlie mentioned, cash is harder to trace,
but also keep in mind, if you choose to write off your investment costs, your going to have to make an effort in keeping a balance.
Hes probably keeping a hobby beeyard, and sales. In this case I wouldn't write anything off, and keep all sales on a cash basis. But he is mentioning hes looking to run his beeyard as a business , or grow into a business. So in this case, the best thing would be to set up the business in accordance to the taxation laws, and run it and file accordingly.

And ya, accountants can be costly, buts is a cost for the right advice

[Chef Isaac]

I would suggest having a CPA help you set up your quickbooks and accounts. For example, tools and clothing would fit under supplies while boxes and such are under equipment. The CPA will help you set the account up and teach you how to use quickbooks. They will help you get it ready and maintain it so all you will need to do is pass it off to an accountant if/ when you are ready to pay taxes.

There is a lady I am using out of Dallas who is awesome. If you would like her number, just pm me. She will teach you how to use quickbooks to its fulliest potential. She will help you set up your accounts, maintain the accounts, and help you as much as you need.

[gmcharlie]

wondr if she can get that dang quickbooks to accept negitive numbers........ darn program won't let you enter a loss in any normal fashion!

[Andrew Dewey]

I've used QuickBooks for years and am very comfortable with it. The CPAs I work with don't have much experience with Agriculture and I don't want to pay them to learn - hence my search for some sort of a reference for me.

Thanks everyone for all the input. I see I have more research to do.

[Countryboy]

I am not familiar with "direct taxes"
We pay income tax, income generated off any service provided, simply put.

A direct tax is a flat tax. It sounds like your income tax is a certain percentage of all money that comes in.

Our income tax is a privilege tax. What is being taxed is you using federal privilege, and it is measured by the dollars you make by exercising that federal privilege. Dollars you get that don't involve using some sort of federal privilege are not taxed as income.

Our income tax operates because lawmakers created special legal definitions for common words, and in law, you are required to ignore the common meaning and use the legal definition. For example, if the legal definition says the definition of red is the color green, and the tax is applied to everything that is red - are red objects taxed, or are the green objects taxed? (Answer - only green objects are taxed, but ignorant people will pay the tax on red objects too. This is why most non-federally privileged Americans pay income tax - they don't know their earnings are not defined by law as income.)

[pahvantpiper]

"This is why most non-federally privileged Americans pay income tax - they don't know their earnings are not defined by law as income."

You may be right countryboy, but I know more than one person in prison for not paying income tax on earnings. If there was a way out of it, I would take it.

[JohnK and Sheri]

Lets keep this on topic. If you want to complain about our tax system (and don't we all?:D) please take it to tailgator.
Sheri

[randydrivesabus]

Andrew-Have you looked at the Farmers Tax Guide, which is an IRS publication?
If you can't find it on the IRS website I'll link you.
I am a CPA with loads of ag experience but I'm not really into giving tax advice on message boards and I'm not looking for new business.