On-line "Shop" closing

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

Can't have too many years operating at a loss or break
even....

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
http://www.polyclay.com

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
http://www.polyclay.com

In article ,
uybeads (BeckiBead) writes:

What's this crunchy thing in the rice?

LMAO

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
www.eclecticbeadery.com
http://www.rubylane.com/shops/simplexities

On Tue, 30 Dec 2003 02:38:08 +0000, Kyla wrote:

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).

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

Haha, I get the package one alllll the time!

Charlie.

"Kaytee" wrote in message
...
In article ,
tars (Cheri2Star) writes:

"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?....."



---
Outgoing mail is certified Virus Free.
Checked by AVG anti-virus system (http://www.grisoft.com).
Version: 6.0.545 / Virus Database: 339 - Release Date: 27/11/03

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

By reinvesting instead of taking money out. Some of us are working towords
profit tomorrow at a higher level, rather than profit today that's taxed away
and no money to book the next show.

BTW--that's what corporations do. Giant Corporations plow the money back into
buying more assets. You can bet that the one's making the most *income* (which
is WAY DIFFERENT from *profit*, please don't forget) are NOT paying the most
taxes. Corporate Giants actually pay very little towards running America in
taxes.
Sarajane

Sarajane's Polymer Clay Gallery
http://www.polyclay.com

In article ,
uybeads (BeckiBead) wrote:

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

OK, I had to play "lets ask the IRS!" with my friend Zach, who works for
the IRS.

He says that it's actually very common for companies to never show a
profit because the current trend is to reinvest all profits into growing
the business. Depending on how you do it (and here's where
non-business-major me gets lost in details) wages paid to employees,
including yourself, isn't profit, it's an expense, so everyone can make
a living even if the business isn't showing a profit. The employees pay
income tax, and the employer pays employment tax (which is a hidden
income tax, and that's why self-employment tax is so high).

Not making a profit for several years is a red flag, BUT all it flags
them to do is look at you to determine whether or not you're actually
*trying* to run a business. If it looks pretty borderline, they will
look more closely at you. In most cases it's obvious. Writing off all
your purchases as "business expense" and then not doing any marketing...
that'll get you nailed!

Having a website, listing on eBay, and posting ads here would pretty
well cover your heinie as an authentic marketing tactic.

--
-Kalera

---------

http://www.beadwife.com
auctions at http://www.snurl.com/1sfe