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Posts: 4266
| Oh yeah....I just spent 2 hours talking to several people at the IRS, and the answer is the same...you pay it.
You may be a "business not for profit", but then you can't write off any of your other expenses.
You don't pay if you export......is that why you can only buy HR's in Canada?
Go to the IRS site and look at all of the puplications. Ones about small businesses. Ones about self-employment. Ones about excise taxes and Form 720 and how to fill it out and report your sellings. And you better have good records.
I'm meeting with the Small Business Administration and an outfit called SCORE, that is a group of retired businessmen who help self-employed and small businessmen get started.
Because I'm working through the DVR, they offer courses that they will pay for, and might even have start-up money if I qualify and can prove that I can show a profit in 2 years.......who the hell can do that?
I think that I'm better off syaing "Screw it", and sell a couple lures on e-bay every month.
Or maybe I'll have a big rummage sale once a year? |
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| I misstated the excise tax in my previous post. I refreshed my memory. It is a manufacturer's tax, meaning that once the item is done being manufactured and is ready for final use, it is taxable. So if you're selling to a retailer, you (the manufacturer) are liable for the tax (not the retailer). But if you are selling to someone for additional manufacture (lure blanks would be a good example) you do not have to withhold the tax assuming (but only if) they have an exemption certificate. So that's that. Sorry for the confusion. I'll check my email now (yikes).
John |
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Posts: 4266
| One part that I found interesting is that you pay quarterly....regardless. The way that I see it, I should only have sales in one quarter. Jan- April should see the bulk of sales. Do I divide all of the taxes and only pay a fourth, or do they expect me to pay regardless?
Do you have to hire somebody to handle all of this for you?
I know that the IRS told me that I had 3 years to turn a profit. What if I don't?
Who knows enough about this to have a sit down, or do you hire an atty.? And an accountant.
Amazing how a hobby isn't a hobby any more. Where do they draw the line?
If I'm a business, can I deduct body costs, all hardware, paint, Envirotex and the room that I built to paint in against any profits?
So what happens when I don't turn a profit, but still want to make lures as a "not for profit" enterprise?
I'll wait for a swap after The Milwaukee Show and sell everything there.
How do you guys with web sites handle all of this. Is shipping figured in with the price, or is that a write-off.
I guess I have a lot to learn.
Don't think that I'll paint any more this year unless its repairs or if people send blanks, then I don't have to worry about taxes.
Edited by Beaver 5/3/2006 6:07 PM
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| If you don't make a profit after 3 years you become a hobby again and lose any tax benefits... (But still have to pay taxes) Shoot me.
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Posts: 1207
Location: Pigeon Forge TN. | My two posts were pulled. I said something wrong? It wasn't ment to be, Just joking around like some others.
Beav,
A good CPA could help you figuer out what you need to do.
Edited by Stan Durst 1 5/3/2006 7:15 PM
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| Stan
For your 2 posts check the thread - Ready for 10% price hike across the board?... its still there. These 2 threads have got a little confusing, out to be 1 thread |
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Posts: 1207
Location: Pigeon Forge TN. | Thanks pb,
Your right, I was confused. Getting old is sure no fun.  |
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Posts: 1504
Location: Oregon | I have known for a long time that I make very little money at this business. You can clearly see now why so many baits (more all the time) are made overseas. By the time we build a good bait we have easily 1.5 hours into them and after taxes, materials, and our time we are lucky to be earning minimum wage. I think John is right, just pay the taxes quarterly and be done with it. If you can't make it after taxes, quit.
jed v. |
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Posts: 2037
Location: lansing, il | ok how bout making the product free but charge x amount for shipping and handling:) in all seriousness i think the best thing to do is suck it up and pay it!! figure it into the cost of the product, unfortunetly it has to be passed along to the consumer as well.
Edited by muskihntr 5/3/2006 11:03 PM
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