i had 1 litter this year.

what tax forms do i need to use?

what deductions?

http://pub12.bravenet.com/forum/static/show.php?usernum=976632990&frmid=4&msgid=784702&cmd=show

http://pub12.bravenet.com/forum/static/show.php?usernum=976632990&frmid=4&msgid=781287&cmd=show

My accountant told me that with things the way they are right now the government does not want to hear boo from you if you are loosing money. If you are loosing money then breeding dogs is just a hobby. However, should you start making money, you had best be declaring every penny.

Breeder's CPA is on track w/ mine. I had 1 litter last year and at the end of the year was ~$6000 in the hole due to competition, etc, expenses. The IRS doesn't want to fool w/ the likes of us.

One of my puppy buyers is an IRS auditor. The IRS wants you to declare one puppy sold. And the board of equalization wants the sales tax on every puppy sold. If you do not report it they consider it tax fraud. You are allowed to deduct any expenses on your taxes but the government wants to hear about all sales, especially in this economy. I have taken a loss for 6 years in a row. The IRS is fine with your reporting a hobby with a loss for many years in a row just so you are showing that you are trying to make a profit like advertising, etc;

This is what my tax person says... as long as the losses are decreasing in dollar amount each year.

Been there and been audited on the kennel.

They need to see that if you are breeding and selling-- you report.

More importantly, watch your terminology. It is one thing to be a hobby kennel, another with any other wording. My Auditor caught that, and although I changed website and ads he scolded and warned me.

On Audit, I did show impecable records of about 2 litters per year, food, vet, handler and entry bills, etc.
He also owned a yellow lab!! so probably gave me a break.

It is not fun!!

I have 2 friends who are retired IRS auditors and I had a very long chat w/ the one a few years ago over this w/ regard to both dogs (they are breeders/show folks) and horses. He confirmed there needs to be an intent to profit over a period of time in order to set up as a business and file w/ the IRS. States differ in the minimum amount you can profit by a venture before registering it as a business so it behooves the OP to ask his/her CPA if they have one since that person will stand behind their work should you be audited.

I talked to a cpa, and he said unless i make a profit, no need to turn in,

but now i may have made a bit of a profit, and wonder if i should start with filing as a hobby.

from what i understand, a hobby does not have to be turned in unless i make a profit. and a hobby does not have to pay ss taxes.

if i file as business, i will have to file every year regardless, and i must make a profit at least 2 years out of 5.

What did your CPA feel you should do about collecting sales tax on puppy sales?