have any of you started a side business?
For example, you write or plan to write some firearms related articles, you are going to be an instructor, etc.
so will need to write off some ammo, equipment, and stuff.
Just wondering.
I have not looked at Brownell’s, Midway, CDNN, LGS, etc. stuff,
but just noticed that I spent 3.5K at PSA alone last year.
I think there are some significant savings to be had if work related.
Thank you for any info.
As one that was audited by the IRS a few years ago…I can tell you that I will NEVER take any odd deductions and try to pass them off as “business expenses” ever again.
The IRS agent also told me that…surprise…one thing that triggers an audit is taking too many “business deductions.”
-brickboy240
Yeah,
I am not saying to paint your house and build a pool from the “business expenses” and supplies you bought in your business that remodels homes and try to write it off.
I meant say your are instructing some courses, writing, consulting, are an IC, etc. that requires you to have certain clothes, pieces of equipment, shooting, is there some legit manner to account for and write off appropriate amounts of stuff that is not complicated and time consuming for someone that does it part time.
But, I see your point. This regime is even going so far as to want to take the mortgage interest deduction. Talk about shitting on the American dream.
All I can tell you is that if you take deductions…you better keep some damn good records.
I did not…and paid a price.
Lesson learned…the deduction is not worth the price of being audited.
YMMV
I know people that deduct all sorts of crazy shit on their taxes as “business expenses” and they never got caught like I did. My view is that they are playing with snakes.
These days, the IRS is much more aggressive and looking for violators than in the past. Govt is broker than before and looking to get more from you…think about it.
-brickboy240
If your business is legit and showing a reasonable profit after expenses you will have little trouble. A hobby business that enables you shoot cheap will get you in trouble. A real business has expenses few dreamer’s imagine. Your GL cost alone will probably be 20% of your gross income. No commercial range in there right mind would allow you to conduct classes on their property without hefty GL policy. The old saying is… If it were easy everyone would be doing it!! GH
You consider it a side business. The IRS considers it a hobby.
If you want the IRS to see it as anything else you better have an actual income stream, code and zoning, occupational licenses (county, city and state), a EIN and a retail sales tax certificate. And that’s just for starters.
Thanks,
what I am getting at is not the actual owning, running of a business. It is pretty straight forward how that goes down.
But what about the guys that instruct for someone’s classes, write articles for a journal, consult for a company, etc. part time on the side aside from their full time job?
If someone gives trap and skeet instruction for a range, they have to be good, own some stuff, etc. It may also be their hobby, but what of it is legitimately able to be written off? Or you need a camera with super macro capability for article pictures, do research for a book, etc. ?
I see ICs writing off home offices when they go someplace to work, the travel to that work, the licenses to do that work, etc. that do not own the business.
Contractors/Consultants are also 1099 employees reporting income in that manner.
A lot of people like to use the word “independent contractor” for their hobby business. It’s probably the number one IRS red flag. When you are an “independent contractor” for a business, your income is reported as an operating expense for that business. So if you aren’t actually working for a business you can’t call yourself an “independent contractor” simply because you take your friends shooting and call it “instruction.”
Also independent contractors still need things like EINs, occupational licenses, etc.
My dad runs a very successful CPA firm, and will be the first to tell you an audit is worse than a DWI. No bigger hassle for simple, elementary mistakes.
Sent from my Galaxy Nexus using Tapatalk
Ok, thanks , keep the info coming. Let me try to bracket it in though.
I am not talking about running a business, or the IC stuff you have a 1099 to show for.
For clarity, I am not saying “I like to drag race, so I want to write off all the cool and expensive stuff I do to my car”
It is more like, “I like to drag race, if I write articles about drag racing or have a drag racing seminar at the strip there must be some reasonable about of the cool and expensive stuff I did to my car that is acceptable to write off.”
What I am finding when I check with buddies is:
either guys that work get paid direct, have an LLC they pay themselves from,
are writing off supplies, office, mileage, etc.
or
I suspect they are doing it small scale cash and not worrying obviously about writing anything off.
I had two IC jobs on the side last year, I got paid direct, do not have an LLC, about half a dozen weekends of 20K in 1099 income. I was planning to deduct some clothing, a small, inexpensive portable lap top, some books, mileage etc. It all seems pretty straight forward except what part of my home office would be acceptable.
But lets say I was going to write a book or publish some articles. Do I have to set up a business to make it a business expense, or what if it ends up not being profitable? From some of the signatures around here I see guys publishing stuff. And while many here may be full time civilian employed in gun stuff, I suspect many are part time. If you went to the range and shot a dozen different body armor plates, used 2K of ammo, and took pictures for the article, but you don’t make any money off the article, how do your write it off?
Yes. And if your business is not profitable, your deductions cannot exceed the reported profits. Otherwise we would all have a freelance female photography studio and weapons evaluation business.
And the world would be a better place!