Tax Time

[cd38]

Anybody planning on buying any equipment with your refunds, lol if you are getting one. Just wondering cause this is my christmas present.

 

[riverfrontbrewer]

No refund here, but it's planned that way!

 

[peachwein]

Haha, i asked this question last year. The majority of people here essentially (without really saying it) said i was stupid for getting a refund.. and that i should have arranged it so that i wouldnt be getting one, because of the interest i could be earning... I however will still be getting a refund this year, and i do plan on going all grain in the spring, and a refund may help.

 

[BendBrewer]

No returns. I don't lend the Government money.

 

[morgantm]

No returns. I don't lend the Government money.

Same for me

 

[doctorRobert]

I'll probably owe money... errrr

 

[BendBrewer]

I'll probably owe money... errrr

Just consider it an interest free loan.

 

[doctorRobert]

Just consider it an interest free loan.

Unless I owe too much, then I'll pay a penalty/interest, but I dont think the hit will be that bad.

 

[maxamuus]

Just consider it an interest free loan.

Only the &(%^ing government would be so kind to LOAN you your own money and want it back.... but i guess that is for the debate forum.

 

[doctorRobert]

Only the &(%^ing government would be so kind to LOAN you your own money and want it back.... but i guess that is for the debate forum.

It's not the governments doing - the goverrnment doesnt take loans or loan out any money, but people do it themselves and not even know it.

Anyone, who isnt self employed, should calculate what their w-2 withholdings should be for their particular situation. The IRS has very good calculators that do this for you. The self employed should make estimated tax payments. There's no reason for anyone to owe a large amount, or be due a large refund with proper planning. I owe money because I have to start paying back a home buyers tax credit.

Anyone who has a large refund, previously told their employer to make these tax payments to the IRS through form W-4. The IRS isn't deciding how much to take out, the employee and employer are.

 

[Ricand]

Does anyone write off their brewing equipment? Anyone could set up a simple LLC for the purpose of researching a brewery business model, then your equipment would cost 30% or more less. You could buy test equipment and do research for the company and write off the equipment. You can legally do this without any profitability for 3-5 years to test viability of the corporate model. Your research could extend to tasting your competition's product or visiting your potential competition's brewing facilities. Just a thought..

 

[ChandlerBang]

Audits are not always random.

 

[remilard]

Does anyone write off their brewing equipment? Anyone could set up a simple LLC for the purpose of researching a brewery business model, then your equipment would cost 30% or more less. You could buy test equipment and do research for the company and write off the equipment. You can legally do this without any profitability for 3-5 years to test viability of the corporate model. Your research could extend to tasting your competition's product or visiting your potential competition's brewing facilities. Just a thought..

Since I am not interested in starting a brewery this would obviously be fraudulent, so no I do not do it.

Also if you have income in the 33% marginal bracket you probably are at high risk of paying AMT anyway.

 

[doctorRobert]

Does anyone write off their brewing equipment? Anyone could set up a simple LLC for the purpose of researching a brewery business model, then your equipment would cost 30% or more less. You could buy test equipment and do research for the company and write off the equipment. You can legally do this without any profitability for 3-5 years to test viability of the corporate model. Your research could extend to tasting your competition's product or visiting your potential competition's brewing facilities. Just a thought..

Wouldnt you only be able to write off your expenses against your revenue? So unless you're a pro brewer, not really possible. I think you'd have a hard time writing off your homebrew equipment against the your salary and other income. Also why would you need to setup an LLC, can you just be a sole proprietorship?

And to setup any brewing business, dont you need a license or two or 7? Hard to write off brewing gear without being a brewery.

 

[ChandlerBang]

Wouldn't you only be able to write off your expenses against your revenue? So unless you're a pro brewer, not really possible. I think you'd have a hard time writing off your homebrew equipment against the your salary and other income. Also why would you need to setup an LLC, can you just be a sole proprietorship?

And to setup any brewing business, don't you need a license or two or 7? Hard to write off brewing gear without being a brewery.

You can write that stuff of as it shows up as a net loss from a business. Reducing your overall income and tax load. The licenses and stuff would be the deal breaker I think. If you had ZERO sales, and audit would hose you because it would be very obviously fraudulent.

 

[BendBrewer]

Only the &(%^ing government would be so kind to LOAN you your own money and want it back.... but i guess that is for the debate forum.

Yeah, but I understand that living in the greatest country on the planet isn't free.

 

[doctorRobert]

Yeah, but I understand that living in the greatest country on the planet isn't free.

It is for 47% of us.

 

[Ricand]

Just trying to be helpful here. There have been many books and articles written on this subject. It does require effort to set up and maintain proper books to stay within IRS guidelines. I've owned several businesses, some of them very profitable, others never turned a profit. The IRS will begin questioning any business that doesn't turn a profit within 3 years and you must by 5 years. Audits are definitely not random for the most part.

You don't need to pay for licenses when you are in the 'investigative phase' of your corporate model. After investigating, you may simply decide it doesn't have the profitability potential you need and shut it down later.

Have you've ever wondered whether you could make it as a microbrewery or had any interest in making a living off this hobby? If the answer is no, it would be fraudulent for you to set up a business to see if it could work.

It's not something you can do off the cuff, it requires work, research and preparation. However, the rewards normally offset the effort required.

 

[bob1852]

Have you've ever wondered whether you could make it as a microbrewery or had any interest in making a living off this hobby?

Could you still enter homebrew competitions?

Most state

No commercial operation or equipment may be used.

And yes, I'll admit, I'm being a little bit of a troll here.

 

[maxamuus]

It is for 47% of us.

A large portion of that 47% are even paid to live here.

I need to brew some big beers so they will be ready for April. Tax time pisses me off.

 

[riverfrontbrewer]

Just trying to be helpful here. There have been many books and articles written on this subject. It does require effort to set up and maintain proper books to stay within IRS guidelines. I've owned several businesses, some of them very profitable, others never turned a profit. The IRS will begin questioning any business that doesn't turn a profit within 3 years and you must by 5 years. Audits are definitely not random for the most part.

You don't need to pay for licenses when you are in the 'investigative phase' of your corporate model. After investigating, you may simply decide it doesn't have the profitability potential you need and shut it down later.

Have you've ever wondered whether you could make it as a microbrewery or had any interest in making a living off this hobby? If the answer is no, it would be fraudulent for you to set up a business to see if it could work.

It's not something you can do off the cuff, it requires work, research and preparation. However, the rewards normally offset the effort required.

I have always wondered where people come up with the "must turn a profit in 3-5 years" thing.

 

[Ricand]

I have always wondered where people come up with the "must turn a profit in 3-5 years" thing.

Now you know from the linked article.

How to prove your Hobby is a business (for those that didn't click the link)

The IRS has a "3-of-5" test. One popular test for determining profit motive is called the "3-of-5" test. If your business made a profit in any three out of the past five consecutive years, it is presumed to have a profit motive. This means that if you claim a loss for the third straight year after starting your business, you may be inviting an audit.

 

[riverfrontbrewer]

Exactly, it is a TEST, not a RULE. Many businesses operate for years in the red, due in large part to Int/depr/amort...non cash items. Yet a 3-5 test is never considered, because of the fact that it is run as a BUSINESS and not a HOBBY.

I would strongly advise against this brewing hobby as a business venture unless you were very serious about going commercial.

Now I know, thats funny ****!

 

[Ricand]

Now I know, thats funny ****!

Hope I didn't offend. It wasn't clear on your initial post "I have always wondered where people come up with the "must turn a profit in 3-5 years" thing." if you were commenting that now you know, or you were still wondering. I made the assumption that you read the link and your question was rhetorical, but wasn't sure if others read it. That's why I excerpted from the link.

You seem astute in this area, or at least strongly opinionated.

 

[curlyfat]

A large portion of that 47% are even paid to live here.

I begrudgingly admit that I am one of these. Because the Government views me as "poor" and I have 3 kids, my tax "return" is substantially larger than what I pay in (which is almost zero). I think it's a stupid system, but I don't quite have enough integrity to give it back! :cross: I do always give a hunk to something charity.

For the record, I do not have food stamps, or any other Government handouts. I feed my kids all year, still put money in the bank, can afford my brewing toys, have no debt (except the mortgage), and still they feel the need to give your hard earned money to me because I "can't afford to live". Bah, it's actually insulting.

Sorry for the situation, I think it's crap, but thank you for the conical fermenters (yes that's plural) that you are all buying me next month!

(sorry again)

 

[zanemoseley]

I closed on our house in early December 2008 and got the subsequent tax "credit" of $7,500 which I have to pay back $500 a year. I haven't spent a dime of it yet. A co-worker got in on the revised credit that began January 1st 2009, he got $8,000 without having to pay it back. Now if that doesn't piss you off lol.

I could have got some cool stuff with $8k. I'm to financially responsible to spend the $7,500 which I know isn't mine but couldn't resist taking it in case of a rainy day. Oh well in 15 years it will be mine lol.

 

[culturejam]

No returns. I don't lend the Government money.

Nice! Do you adjust your W2 withholding every year to match the decline in your mortgage interest deduction to make sure it zeroes out? If so, color me insanely impressed.

I used to work for CPAs, and I know some people are actually that on top of stuff. I just can't be arsed to keep up with the decline curve of the mortgage deduction and the ever-increasing property tax deduction:

 

[remilard]

I try to keep mine +/- 2%.

A $6500 or so tax credit for a ground source heat pump installation should result in a refund outside of that tolerance this year. It will go in the big fungible money pile with the rest of it.

 

[r8rphan]

Anybody planning on buying any equipment with your refunds, lol if you are getting one. Just wondering cause this is my christmas present.

TAXES????

Sheee mang! Don' harsh my buzz, homie!
:fro:

 

[culturejam]

Sorry for the situation, I think it's crap, but thank you for the conical fermenters (yes that's plural) that you are all buying me next month!

You remind me of my next-door neighbor. Nice guy. He works for a company that does very seasonal work (installing in-ground lawn irrigation systems), so every late fall, his boss "lays him off" so that he can draw unemployment benefits. And then every early spring, he magically gets rehired. During the "laid off" period, my neighbor submits false reports of attempts to find work so he can continue to draw the benefit checks. He's been doing this for about 10 years now, and he doesn't seem to feel any sort of shame or embarrassment over it.

And the real kicker is that he likes to bitch about the taxes and honestly can't figure out why they are so high. And he likes to rail about freeloading minorities.


By the way, curlyfat, you could very easily "give back" a bigger portion of that money to a charity that supports people who are actually struggling. Surely there are local charities in your area that could use the cash. Maybe buy yourself just one conical with "my" money.