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tax questions

Discussion in 'Financing' started by PeytonM, May 5, 2014.

  1. PeytonM

    PeytonM Member

    Joined:
    May 3, 2014
    Messages:
    22
    Location:
    WI
    I don't really know if these things differ state to state or what not but here we go.

    lets say I started a small exc business and had lets say a 15K Skid steer and a 20K mini exc and a 10K gn dump trailer and marketed lot clearing brush removal trech/ ditch digging and such pretty much any thing and everything I would be able to do with those 3 things and a truck and say my truck was worth 12K

    how would taxes work for them? I know at one point I talked with my tax lady about claiming farm use on my draft horses I have because I use them to do all my field work but bale the hay. and I was told I had 3 years to claim a loss and if I couldn't prove I made a profit in those 3 years I would get the hobby farm card.

    So is it the same thing with this? I have 3 years to provide a profit? I don't know how anyone could make it 6 months with out profit because of bills.

    I all ready own a dump trailer and truck because of my horses My dad has a skid steer I could use for the time being the thing I would only need to buy up front is a mini exc. I just don't know for tax reasons what would work out best for me. I also don't know what items I can write off as an expense. all hoses wear and tear items oil and such.

    I will be totally honest I prolly won't be starting any time soon but I know from past experienced when I was looking in to things it was small things that bit me in the butt and put the halt to my plan or idea.
     
  2. Delmer

    Delmer Senior Member

    Joined:
    Jan 4, 2013
    Messages:
    4,694
    Location:
    WI
    http://www.irs.gov/uac/Business-or-Hobby?-Answer-Has-Implications-for-Deductions

    This is a good start, most of the rules are federal/IRS, the states pretty much take your federal filing the way it is. If you can make a profit in three out of five years, the IRS "presumes" you are a business, otherwise you might have to explain why you should be a business.

    Even as a hobby, expenses are deductible from that activity's income. You just can't deduct any losses from other income, like the proverbial doctor's horse farm.
     
  3. PeytonM

    PeytonM Member

    Joined:
    May 3, 2014
    Messages:
    22
    Location:
    WI
    Thanks where in wi are you from?
     
  4. Sean Vangill

    Sean Vangill New Member

    Joined:
    Jun 10, 2016
    Messages:
    4
    Occupation:
    community out reach specialist and equipment loan
    Location:
    Norwalk CT
    I know that with Section 179 you can treat up to 1/2 million in equipment as a business expense on your tax return. I have actually heard very equipment lenders talk about this.

    There are Section 179 calculators that can help you determine your tax savings. There are also list online where you can see what type of equipment you can use towards Section 179. Your tax person will no best but if you want to get an idea of where things stand you can read up on Section 179 and take advantage of the many calculators that are out there. From my experience they are usually free.
     
  5. hetkind

    hetkind Senior Member

    Joined:
    Nov 3, 2015
    Messages:
    472
    Location:
    Unicoi, TN
    not really sure exactly what questions you are asking...

    Is it about personal property tax at the local or state level?

    Is it about depreciation schedules on the purchase of capital equipment?

    or is it about paying income taxes on business income and possible year to year loss carryovers?

    I think you are worried about not having enough business income to cover costs and having a loss that cannot be deducted from non-related income.

    Give us more details and we can talk.

    Howard
     
  6. JDOFMEMI

    JDOFMEMI Senior Member

    Joined:
    Jan 4, 2007
    Messages:
    3,074
    Location:
    SoCal
    Also keep in mind "profit" as related to the IRS, and making money with your business are not necessarily the same thing.