On-line "Shop" closing

Kaytee, remembert o right off EVERY CENT on your tax schedule C. Even losses and high costs can be a positive thing at tax time, if it saves you on the Self Employment tax bill. Sarajane

Sarajane's Polymer Clay Gallery

Oh, I plan to.... Would be nice to show a little profit after all the deductions, though. Can't have too many years operating at a loss or break even.... Kaytee "Simplexities" on

Oh sure you can. Most small businesses operate that way forever. First DH and I had a business with 20 employees. We never showed a profit. My brother owns a gas station. If he can manage it, he never shows a profit either. Believe me, it's not an IRS flag to show no profit or small losses - it's run of the mill.

Cheri Cheri (Bubbee to Emily and Nathan)

Beg to differ. If you go 5 straight years *without* showing at least some small profit, the IRS reclassifies your business as a HOBBY -- and you're liable for back taxes on all the other years as well, after those deductions are disallowed and your returns re-calculated. You don't have to show a *lot* of profit, but there must be some within a reasonable period of time. This is to prevent people from using a "business" which never makes any profit as a tax-evasion scheme.

Celine

I was told it was 3 years by a personal accountant, and 2 H & R Block associates. I was once a nanny for a woman that made a living with small businesses; she ALWAYS closed down after three years, because of this (I don't remember the details exactly, but she made a lot of money this way).

of the mill.<

If you are self-employed, it really is a red flag if you haven't made a profit in five years. You apparently lucked out, Cheri.

Carol in SLC My newest creation (12/5):

Maybe once you're well established-- and/or have a business address separate from your home, but not if you are a "part-time, work at home" type business. Besides, even if the IRS allowed it, there's hubby to deal with.... "if you're not really making this a business, why do you need so many beads? why don't you get rid of all these junks (that's Hawaiian pidgin) and do something useful (ie-- contribute to the family's welfare in some measurable way)? when are you going to clean up this mess? what is this crunchy thing in the rice? why do you spend so much time on the computer? what!? another package?....." Kaytee "Simplexities" on

vj found this in rec.crafts.beads, from snipped-for-privacy@aol.comnospam (Kaytee) :

]there's hubby to deal with.... "if you're ]not really making this a business, why do you need so many beads? why don't you ]get rid of all these junks (that's Hawaiian pidgin) and do something useful ](ie-- contribute to the family's welfare in some measurable way)? when are you ]going to clean up this mess? what is this crunchy thing in the rice? why do you ]spend so much time on the computer? what!? another package?....."

ROTFLOL!! point!!!!!!!

----------- @vicki [SnuggleWench] (Books)

(Jewelry) ----------- It's not what you take, when you leave this world behind you; it's what you leave behind you when you go. -- Randy Travis

That is a damn shame! You have some really really lovely pieces at very reasonable prices.

Paula

Kaytee -- I appreciate the report. It is good to know what is working and what is not.

Becki "In between the moon and you, the angels have a better view of the crumbling difference between wrong and right." -- Counting Crows

Cheri -- you are wrong, it is a red flag for a hobby. They will shut you down.

Becki "In between the moon and you, the angels have a better view of the crumbling difference between wrong and right." -- Counting Crows

Think of it this way -- the IRS questions, rightly I might add, how you are living on a business that is continually losing money?

Becki "In between the moon and you, the angels have a better view of the crumbling difference between wrong and right." -- Counting Crows

What's this crunchy thing in the rice?

LMAO

Becki "In between the moon and you, the angels have a better view of the crumbling difference between wrong and right." -- Counting Crows

People wrongly think that there's a three year limit on losses--but that's not true. What happen is after three years straight of losses, the IRS MAY check to see that you are making a legitimate effort before allowing a loss. This "effort" consists of having done sales calls, or doing shows, or maintaining a storefront--or whatever you do, as long as you do SOMETHING. Sarajane

Sarajane's Polymer Clay Gallery

I have checked with several accountants, the lady at HR Block, and called the info lines at the IRS. As long as you show REASONABLE EFFORT to make money, they will accept you as a business and not a hobby, in spite of losses or small profits.

As to "how can you survive if you aren't making a profit? the answer is sometimes you plow as much money back into business as you can---and that eats up "profit" but also makes for next year's income, maybe even at a better level. Sarajane

Sarajane's Polymer Clay Gallery

Mmmmm... I dare not say.... Good thing he's color-blind. He thought it was bits of bone... I never saw green bits of bone before, though.... Kaytee "Simplexities" on

How can one make a lot of money but never make any profit? Makes no sense to me...

I run a business to make a profit. I look at it this way: Pay no tax, make no profit, have no money...

I couldn't run my business if I made no profit.

Mavis

vj found this in rec.crafts.beads, from AmazeR :

]How can one make a lot of money but never make any profit? Makes no sense ]to me...

so far, everything i've made has been reinvested in beads / tools. i do have a large inventory that is "space-holding" the profit so far.

----------- @vicki [SnuggleWench] (Books)

(Jewelry) ----------- The measure of the menace of a man is not what hardware he carries, but what ideas he believes.-- Jeff Jordan

Haha, I get the package one alllll the time!

Charlie.

"if you're