Converting from Hobby to Sideliner
Results 1 to 7 of 7
  1. #1
    Join Date
    Sep 2011
    Location
    Monkton, MD
    Posts
    122

    Default Converting from Hobby to Sideliner

    I made enough money this year with bees (honey, wax, and queen sales) to prompt me to want to declare it a business, so I can deduct the expenses from my profits and not have to pay tax on all the income. Does anyone know what I have to do to properly document my conversion from a hobby to a business? I think I need to establish a cost basis for the equipment and bees, etc. What, if anything, should be amortized and depreciated? Any practical advice from someone who has done it (or is a tax accountant) would be greatly appreciated.

    Also, what number of hives seems like the sweet-spot for making a decent profit for amount of work involved? I've done 20 in the past, but what number seems ideal for a one-person operation (with my the slave labor help from my children)?

  2. Remove Advertisements
    BeeSource.com
    Advertisements
     

  3. #2
    Join Date
    Jul 2016
    Location
    Port Angeles, WA, USA
    Posts
    469

    Default Re: Converting from Hobby to Sideliner

    Quote Originally Posted by Ruthz View Post
    I made enough money this year with bees (honey, wax, and queen sales) to prompt me to want to declare it a business, so I can deduct the expenses from my profits and not have to pay tax on all the income. Does anyone know what I have to do to properly document my conversion from a hobby to a business? I think I need to establish a cost basis for the equipment and bees, etc. What, if anything, should be amortized and depreciated? Any practical advice from someone who has done it (or is a tax accountant) would be greatly appreciated.

    Also, what number of hives seems like the sweet-spot for making a decent profit for amount of work involved? I've done 20 in the past, but what number seems ideal for a one-person operation (with my the slave labor help from my children)?
    Similar boat this year. Bumping to 60 production (and about 50 overwintering nucs). I own another small business, and from that experience alone I know I'm going to my CPA on this. Save every receipt and take it to the CPA. A couple years ago mine saved me over 5 figures from our own calculations, all for $700 fee.
    Instrumental Insemination & Northern VSH Queens

  4. #3
    Join Date
    Dec 2015
    Location
    Shelby, Missouri USA
    Posts
    526

    Default Re: Converting from Hobby to Sideliner

    I set mine up last year. I opened up a separate checking account to help track everything. All income goes into the account so that I can easily track the income.

    The expense side is a little trickier. That is where the accountant comes in. I compiled all my expense receipts in a spreadsheet and gave all of it to her. We depreciated the extractor purchase which was about $800. The meals and lodging for the state beekeeping conference were only partially deductible but not sure what percentage. That is where the accountant comes in. She has done our taxes for several years and it only cost a little more to add the necessary business forms.

    In my opinion a separate bank account is a must. I just opened it with my SS# and gave the business a name. I have heard Quickbooks recommended but I have not found that necessary with my limited expenses. I can just keep track of it at my current level. It may become necessary in the future.

  5. #4
    Join Date
    Dec 2008
    Location
    Menomonee Falls, Wis.
    Posts
    4,178

    Default Re: Converting from Hobby to Sideliner

    Would you ask an accountant or a lawyer for beekeeping advise?

    Crazy Roland

  6. #5
    Join Date
    Dec 2015
    Location
    Shelby, Missouri USA
    Posts
    526

    Default Re: Converting from Hobby to Sideliner

    Quote Originally Posted by Roland View Post
    Would you ask an accountant or a lawyer for beekeeping advise?

    Crazy Roland
    If they kept bees on the side and I was looking to get into beekeeping I would be interested in their experiences.

  7. #6
    Join Date
    Jul 2016
    Location
    Port Angeles, WA, USA
    Posts
    469

    Default Re: Converting from Hobby to Sideliner

    Quote Originally Posted by Roland View Post
    Would you ask an accountant or a lawyer for beekeeping advise?

    Crazy Roland
    An accountant to handle the taxes (if your making enough), a lawyer to save your butt when your county and neighbors get grumpy about your success
    Instrumental Insemination & Northern VSH Queens

  8. #7
    Join Date
    Apr 2009
    Location
    Issaquah,WA,USA
    Posts
    2,769

    Default Re: Converting from Hobby to Sideliner

    Get a license and a good accountant. The IRS loves gentleman farmers for audits. You are a gentleman farmer. Dont do your taxes yourself if you want to keep your day job monies from being seized.

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •