Taxes

Taxes are complex, but very important.
Because tax laws can be extremely complex, small business owners are strongly encouraged to seek professional assistance. A good accountant or CPA (Certified Public Accountant) will help navigate through local, state and laws and also explain how to minimize future tax obligations.

Even if you retain professional tax assistance, your tax responsibilities are still solely your obligation. You should understand how the various tax systems impact your business. Although the following information is not comprehensive, it does provide an overview of the most common business tax requirements.

 I am not an accountant, but I do my own taxes and here are some ideas.  You should discuss these with your accountant, and then share back what you find out if it differs from this.  Having said that, here are some thoughts:

1. Declare your breeding business as a FARM at least until you get started. Use Schedule F. That way you can depreciate your loft, the livestock, claim losses if you lose a bird, deduct the feed, and use income from stock on the farm form. Remember there are medicines, cleaning supplies, repairs, books, and advertising. Depreciate your loft and equipment too.  You should be able to depreciate breeding stock also.  If a substantial part of your income comes from the sale of livestock or breeding birds, then the Farm is where to declare it.

2. Use the Business Form (Schedule C) to declare income and/or expenses if your main income is from the release part of your business. But don't forget all of the expenses in keeping and raising the birds.

3. Don't forget to declare travel expenses to and from your releases. Be sure to declare all of your advertising and marketing.

4. Keep track of cages, baskets, supplies and equipment. All of it can be deducted.

RECORD KEEPING
Be sure to keep detailed records throughout the year to substantiate your income and expenses.  Canceled checks, bank statements and receipts are essential.  Open a checking account for your business that is separate from your personal account, and perhaps a credit card just for the business.  It all will matter should you get audited. It is important the your business is treated like a business and not a "hobby".

Getting Ready.
Get a copy of the tax form that you want to use (or study to decide which one to use) from the IRS early in the year.  That way you will know what records to keep and what receipts to keep.  In general, keep everything.  And you should keep it all in a file for at least 3 years after filing... I keep mine so long as the business is going.

Ideas for deductions:
Professional Organization Dues (International White Dove Society etc.)
Education costs (seminars, courses, books)
Website Costs
Advertising: yellow pages, fliers, business cards, bridal fairs, etc
Office Supplies
Computer costs (if you use it exclusively for your buisness)
Utilities
Medicines
Loft (must depreciate)
Feed, grit, etc
Travel costs to releases
Car expenses
Costs for labor or wages (you can pay someone to assist you - even family members)
Repairs and Maintenance to loft
Baskets and cages (you may have to depreciate these)
Insurance
Birds and breeding stock (breeders may have to be depreciated)
Lost birds (can be totally written off)
Bands, nest supplies, and other breeding costs
Shipping boxes
Postage

If you have others deductions, send them in and I will add them to the list.