# Taxes, schedule F or C?



## Ruthz (Sep 13, 2011)

I was just thinking that a sideliner header would be good. My current question is about taxes, I am considering whether or not it is worth calling my bee income a business (thus requiring a schedule C form) or just hobby income. It looks advantageous to call it a business, since I could deduct a bunch of stuff as business expenses, but I really don't make enough money from the bees to live off of. I'm not quitting my day job. And then I thought, 'wait, is beekeeping farming?' If so, farming is treated differently in the tax world, and I don't know if beekeeping qualifies or if it would be advantageous. 

Bottom line, please make a sideliner section, and any tax related info would be greatly appreciated.


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## cg3 (Jan 16, 2011)

*Re: New Forum Idea: Sideliners*

I filed a Schedule F for the first time this year and it really helped take the sting out of my bee expenditures.


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## sqkcrk (Dec 10, 2005)

*Re: New Forum Idea: Sideliners*

If you have someone who prepares your taxes for you ask them if you should file a Schedule Frofit or Loss From Farming.


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## Ruthz (Sep 13, 2011)

*Re: New Forum Idea: Sideliners*

sqkcrk, I'm afraid I do my own taxes with Turbotax. I am both too cheap to pay someone else, and I feel that it teaches me what to keep track of for deductions. Without this yearly self-imposed suffering, I would never bother to save receipts.


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## jim lyon (Feb 19, 2006)

*Re: New Forum Idea: Sideliners*

Ruthz: start a thread on the commercial forum asking what constitutes a legitimate business in which a schedule F is appropriate and what the IRS might consider a tax "dodge". There are some knowledgable folks on this forum that can give you the answers you need. Pay your "uncle" only what he has coming and not a dollar more.


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## squarepeg (Jul 9, 2010)

*Re: New Forum Idea: Sideliners*

my primary vocation requires the use of a cpa, and when we examined the pros and cons of establishing beekeeping (farming) as a bona fide sideline there were more pros in my situation.

i ended up forming an llc.

the test for irs purposes isn't necessarily that one makes a profit, but rather that there is a reasonable expectation that there will be sales and that the sideline will produce income by the end of the first five years.

it may not make sense to take it this far unless you are paying a lot of income tax with your primary vocation.


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## Ian (Jan 16, 2003)

*Re: New Forum Idea: Sideliners*



jim lyon said:


> hobbyist or sideliner coming to the commercial site to ask and to learn.


but coming to the commercial site to tell us how to keep bees . . . all opinions welcome ha ha


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## Ruthz (Sep 13, 2011)

I am a sideliner trying to figure out tax stuff. Is beekeeping considered farming by the IRS? If so, in what situations is it appropriate to file a Schedule F versus a Schedule C? Beekeeping isn't how I make my living (yet), but I would like to take any deductions that would be legitimate. Does anyone have experience or knowledge about this? Thanks in advance.


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## Beregondo (Jun 21, 2011)

The IRS doesn't care if your farm is small, only if it has a prospect of making a profit.

While building up, it is wise to file sched F so that your losses and offset your other income.

If you're not sure it's going to make a difference, calculate it both ways and file the one you prefer.

If you intend to make a profit, use of Sched F is legitimate.


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## camero7 (Sep 21, 2009)

I use schedule F. I am a sideliner.


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## Shouse (Jul 1, 2010)

*Re: New Forum Idea: Sideliners*



Ruthz said:


> sqkcrk, I'm afraid I do my own taxes with Turbotax. I am both too cheap to pay someone else, and I feel that it teaches me what to keep track of for deductions. Without this yearly self-imposed suffering, I would never bother to save receipts.


Cheap things are of no Value, Valuable things are not Cheap, but having a professional prepare your taxes will save you ten fold! How can you NOT afford one?

Beekeeping is an Agriculture active you MUST file a schedule F, besides you want to, farming has better tax advantages that a schedule “C” type business. You also need to discuss IRS Code Sec 183 “activity engaged with the intend to make a profit” with a CPA that knows beekeeping, ask someone in your area for a reference.


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## wildbranch2007 (Dec 3, 2008)

*Re: New Forum Idea: Sideliners*

easiest way to decide, call the irs three times and ask, the reason I say three times is that its an odd number. the first time they will give you one answer the second time they will give you another answer, what they give you the third time usually will match one of the first two. take that fork in the road.


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## bevy's honeybees (Apr 21, 2011)

*Re: New Forum Idea: Sideliners*

How did I miss this thread? I am a sideliner starting 2012 and took my taxes to cpa. I wanted a Farm form, he did it on C. Miscommunication, I think. I told one person who didn't pass it on that I wanted farm form. Anyway, the owner of the tax office said C or F didn't matter this year, and next year we will start with F form. 

I ended up in a loss, and it does make me feel better about what I spend on my equipment and supplies, that they are tax deductible. I hope that I will start making profit long before 5 years.


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## Shouse (Jul 1, 2010)

*Re: New Forum Idea: Sideliners*



bevy's honeybees said:


> How did I miss this thread? I am a sideliner starting 2012 and took my taxes to cpa. I wanted a Farm form, he did it on C. Miscommunication, I think. I told one person who didn't pass it on that I wanted farm form. Anyway, the owner of the tax office said C or F didn't matter this year, and next year we will start with F form.


If your CPA (and I dont think he or she really is one) said it didn't matter if you filed as a "C" or an "F" find another CPA as fast as you can. What part of farming does he or she not understand? I've been a CPA for over 38 years and that's the sadest thing I've heard.
The implications of filing the wrong schedule are too numerous it discuss here.
Not only are you missing out on farm deductions not available to “C” type businesses i.e. writing off your hives as a single purpose agriculture structure in one year verse depreciating the cost over 30 years…
You also increase your risk of being audited 10 fold by filing the wrong form. Filing a schedule "F" is not an option, it is a requirement if you're in the bee business.


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## Michael Palmer (Dec 29, 2006)

*Re: New Forum Idea: Sideliners*



Shouse said:


> Not only are you missing out on farm deductions not available to “C” type businesses i.e. writing off your hives as a single purpose agriculture structure in one year verse depreciating the cost over 30 years…


And not having to file quarterly if your income from farming is a high enough % of your income.


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## LSPender (Nov 16, 2004)

*Re: New Forum Idea: Sideliners*

Also, sch C requires quarterly tax payments
sch F , allows annual tax payments


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## sqkcrk (Dec 10, 2005)

*Re: New Forum Idea: Sideliners*

"quarterly tax payments"? Or, do you mean quarterly self employment taxes?


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## bevy's honeybees (Apr 21, 2011)

*Re: New Forum Idea: Sideliners*



Shouse said:


> If your CPA (and I dont think he or she really is one) said it didn't matter if you filed as a "C" or an "F" find another CPA as fast as you can. What part of farming does he or she not understand? I've been a CPA for over 38 years and that's the sadest thing I've heard.
> The implications of filing the wrong schedule are too numerous it discuss here.
> Not only are you missing out on farm deductions not available to “C” type businesses i.e. writing off your hives as a single purpose agriculture structure in one year verse depreciating the cost over 30 years…
> You also increase your risk of being audited 10 fold by filing the wrong form. Filing a schedule "F" is not an option, it is a requirement if you're in the bee business.


Well that's a bit scary. So a lousy cpa, though he is certified. When I picked up my taxes the first time I pointed out I wanted schedule f, noting I'd said that to begin with. They said they'd redo, come back on such and such day. Went back, still on schedule C and he insisted that would be alright. So filed that way. 
Maybe I find a good cpa and amend? 
I'm very small 2012. Ended up with loss (less than 1k). I think that was the reason he gave me for leaving it on sch C. I have no idea if that's true, but I shall be asking around for a good cpa and look into re-filing. 

Thanks so much.


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## rniles (Oct 10, 2012)

Ruthz said:


> ...I am considering whether or not it is worth calling my bee income a business (thus requiring a schedule C form) or just hobby income. It looks advantageous to call it a business, since I could deduct a bunch of stuff as business expenses...


You CAN deduct expenses even if it only a hobby (to an extent) ...

http://www.irs.gov/publications/p529/ar02.html
*Hobby Expenses*
_You can generally deduct hobby expenses, but only up to the amount of hobby income. A hobby is not a business because it is not carried on to make a profit._

In other words, "hobbyists can deduct their hobby-related expenses only from the income the hobby generates"


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## Michael Palmer (Dec 29, 2006)

*Re: New Forum Idea: Sideliners*



sqkcrk said:


> "quarterly tax payments"? Or, do you mean quarterly self employment taxes?


Both Mark. If you file by March 1 you don't have to file your FWH, Soc.Sec, Med, quarterly. Only once...with no penalty.


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