# IRS Clasification



## EastSideBuzz (Apr 12, 2009)

What do you classify your bee keeping as? For IRS taxes is it agg other is it agg. Are we farmers? Or are bee's live stock. What do you use for your classifications? My CPA does not know what to file under.


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## Andrew Dewey (Aug 23, 2005)

If you are hobby, it is no big deal - use neither schedule C or F. If the IRS will classify what you do as a business use schedule F.


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## sqkcrk (Dec 10, 2005)

Schedule F, Profit and Loss from Farming. Get another CPA. If they can't figure that out I would be worried about what else they may not be able to figure out.

Unless you don't have enuf Business to claim losses or profits from Business, then I'd understand the confusion.


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## Steve10 (Nov 19, 2008)

I agree with Mark, that CPA is not the person you want doing your taxes. Yes, Schedule F is what you want to file. I suggest you get yourself a Tax program for your computer. Personally, I've used Turbotax for 10 years for my business and personal taxes. Love how you can play with "what if" numbers.

Also, even if this is a serious hobby, make up a business plan with the "intent" to make a profit, then you can write off your losses for years. Since we are producing livestock (bees) that will produce an agricultural product (honey, wax, pollen, nucs, etc.) you can show losses for a long time as long as you are "growing" your business according to your business plan. Business plans can be modified as you go along.

The example case I remember was a small beef cattle operation. Their losses extended over 10 years. When audited by the IRS, they allowed the losses because the folks showed increasing herd numbers by reproducing their own stock, versus buying more cattle, according to their business plan!

FYI - The Principal Agricultural Activity Code that will work for you on Schedule F is 112900 - Other Animal Production.

You are still allowed to write off the losses if the business is terminated...if it doesn't go according to your plan!


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## sqkcrk (Dec 10, 2005)

Go get a Schedule F, fill it out yourself and include it w/ your other papres that you supply your CPA with. Your new CPA that is.


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## Countryboy (Feb 15, 2009)

Unless someone is a CPA or a tax attorney, they are not allowed to tell you how to file your taxes. You have a legal responsibility to research the law (you sign a tax form saying you understand the law and how/if it applies to you) and make a self determination of any tax upon federal income.

I am not aware of exercising any federal privilege in my beekeeping, which is what the IRS taxes. 
The amount of federal privilege is measured by the dollars you receive as a direct result of exercising that federal privilege. (That comes directly from congressional testimony.)


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## EastSideBuzz (Apr 12, 2009)

Steve10 said:


> I agree with Mark, that CPA is not the person you want doing your taxes. Yes, Schedule F is what you want to file. I suggest you get yourself a Tax program for your computer. Personally, I've used Turbotax for 10 years for my business and personal taxes. Love how you can play with "what if" numbers.


Thanks for the answers it is what confirmation I was looking for. Except for the CPA comments. You guys are a tough crowd. I like my CPA and she is the right one for me. Also a relative so I will keep her. Never been audited and with her challenging my deductions probably never will. When you do your own taxes you move quickly up the list for audits. No thanks. She finished the taxes today and I got a huge refund like I do every year thanks to her.


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## Michael Palmer (Dec 29, 2006)

EastSideBuzz said:


> She finished the taxes today and I got a huge refund like I do every year thanks to her.


I wonder about the wisdom of a huge refund every year. Perhaps you're paying in more than you need to. I would rather have my money when I make it, and not when the gov't decides to send me back a bit. Why let them make the interest?


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## Steve10 (Nov 19, 2008)

Exactly my thinking Michael!


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## sqkcrk (Dec 10, 2005)

EastSideBuzz said:


> You guys are a tough crowd. I like my CPA and she is the right one for me. Also a relative so I will keep her. Never been audited and with her challenging my deductions probably never will. When you do your own taxes you move quickly up the list for audits. No thanks. She finished the taxes today and I got a huge refund like I do every year thanks to her.


A. Yes, we are tuff.
B. Suspected as much. Is that a good idea?
C. Did someone suggest doing your own taxes? I suggested filling out the form and giving her the info. It's what I do and w/ my accountant's review some of it is used and some not.
D. Do you file quarterly or something? Finished taxes and refund?
E. Refunds every year? Not because of your beekeeping is it? You have other businesses, don't you?


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## EastSideBuzz (Apr 12, 2009)

A. Agreed
B. Be more drama if she was not my CPA at thanksgiving etc. But, fam knowing what you make not always a good thing. But she has done me right my whole life so it is good.
C. We give her all the deductions we can think of she changes what is wrong etc. Doing it first is a good idea. Might try that.
D. No quarterly yet. Have sold anything. Only 2nd year doing this and it is still a suck hole not a profit center.
E. Yea, Tech Sales guy so have a real job. This is a hobby/sideline and someday will be a retirement project. Only have 50 hives so not this year.
F. Will have some real honey poundage next year so we will see when the whole marketing and distribution thing starts to be needed.


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## sqkcrk (Dec 10, 2005)

Then why are your taxes done now and your refund and all? Oh. You must have filed for an extension. Right? Not to get too personal or anything. But it does seem as tho your taxes are just now getting done, by what you said.


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## EastSideBuzz (Apr 12, 2009)

We are procrastinators and this has been a really busy year for all of us. Lots of family issues my mom dieing, it being my CPA's sister and all. yea your getting personal but, we are all family right. We have large ancestors in common all our bee's are related right.


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## sqkcrk (Dec 10, 2005)

My condolences. I know what that is like, loosing a parent. I wish you better days to come, though, at least from time to time, you will really miss her. Best of luck and enjoyment w/ your beesness.


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## jmgi (Jan 15, 2009)

Would like to know how most of you have set up your business, are you running a LLC or what? Quarterly taxes? I started expanding my operation from hobby to sideline this year, and I am putting alot of money into it, with no profits yet, I am going to start looking for a CPA soon as I get the business plan established. Do you have to see a certain type of lawyer to get the business established? Thanks, John


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## sqkcrk (Dec 10, 2005)

jmgi said:


> ..., with no profits yet, ...


Be patient. Be very patient. Like Job.


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## jmgi (Jan 15, 2009)

I am patient, going from hobby to commercial at 53 yrs. old would qualify me as patient, wouldn't you say? John


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## sqkcrk (Dec 10, 2005)

How long were you a hobby beekeeper? Some would just call that late. But not me. The time is right when the time is right. Best wishes. May you see a profit before you kick the bucket.


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## jmgi (Jan 15, 2009)

sqkcrk,

On and off hobbyist for 35 yrs. Worked a job that I hated for 32 yrs., so yeah, I'm having the time of my life now in early retirement, finally able to do what I've always looked forward to doing, and doing it in a big way, that's the plan anyway. John


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## USCBeeMan (Feb 7, 2009)

Retired from the IRS (IT not Exam or Collection).

I treat my bees as a business. I may not have 50 hives but I expect to get there. At the moment my business is in the red big time but I expect that to change within the next couple of years. My expectation is to be profitable. Honey, wax, propolis, selling nucs (in the future), selling queens (in the future). I do sell a few nuc boxes I make. They are part of my business and are included.

I file the Schedule F (Farming).


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## Steve10 (Nov 19, 2008)

EastSideBuzz - sorry to hear about your Mom. Never easy.

Good to see your getting some good advise here. Started my first business 40 years and 10 accountants ago. Been "dancing" with the IRS for a long time and still wish I knew more, kind of like beekeeping. I use that TurboTax to keep my 2 Schedule C's, one Schedule F, one S corp, and 1040 straight in my head and provide my CPA with the information he needs and wants instead of the old shoebox full of receipts I handed over years ago. Keeps us both honest and it also helps keep my tax knowledge and especially my tax strategy current. I think the last figures I read were that almost 30% of us overpay our taxes (of course, the flip side is that same percentage cheat!)

One of my pet peeves is the tax laws are so complicated that it requires the majority of Americans to seek professional help to file their own tax returns! Something just not right about that.

Fortunately, Countryboy is wrong when he says; "_Unless someone is a CPA or a tax attorney, they are not allowed to tell you how to file your taxes._" Unless you have complicated tax issues, the folks at H&R Block, Jackson-Hewitt, or TurboTax, to name a few, can tell you how to file your taxes and and you can still stay in your comfort zone of having someone else's name on your tax return to support you in case of trouble.

I admire your loyalty to your CPA. Sounds like you understand the possible downfall of having relatives prepare your taxes. It's a fine line you walk if there is ever a problem, but that's another "seminar." Haven't seen my brother at the Thanksgiving table or any table, for that matter, since 1990 over a similar issue - talk about drama!

Good luck in your business venture. Let your CPA worry about the money so you can enjoy you bees.

Steve

PS - In 40 years, only been audited once for a CPA mathematical error in the dark, pre-computer age. So maybe "Seasoned" is a better word than "Tough" to describe us.


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