Do you love horses? Has your equestrian hobby turned into a for-profit operation? For many, this is true. While having a great love for horses may be enough to get an equine business started, it is balanced books and tax knowledge that will keep your business going for years to come.
Tax deadlines are fast approaching, and like many small business owners across the U.S., horse owners and equine businesses are finalizing their tax forms. Like other Americans, equestrians are looking for ways to save money and earn tax credits.
What many horse enthusiasts may not know is that a majority of equine costs may be tax deductible. The key is knowing which things quantify as a deductions, and which do not.
The first thing you need to determine is if your horse habit is a hobby, or a business that earns profits. In order to retain IRS business eligibility, you must show a profit at least every few years. Examples of equestrian businesses that may have started as a hobby but have turned into a profitable enterprise are horseback lessons, rodeo, horse shows, horse boarding, even breeding a mare with the intent of selling the foals is a legitimate business.
If you run an equine business, make sure you take the proper steps to keep your finances in order. Make sure you keep a ledger of all horse-related and business expenses. Some examples of this may be vehicle and trailer upkeep, medication, travel, meals and lodging, gas, mileage, advertising, insurance, feed, and veterinary bills are all valid tax deductions for an equine business.
Don’t forget about depreciation on equestrian-related items. Some of these include: barns, fencing, tractors, tack, mowers, and other horse equipment. If you use these items for your business, they are considered legitimate tax deductions and are recognized by the IRS.
Paying your back taxes is another important first step to clearing your debt with the IRS. It is impossible to start earning tax credits or start saving money on taxes until you clear your IRS debt. To begin this process, you will need to reach out to a certified tax resolution lawyer. Look for companies with great Better Business Bureau (BBB) ratings and five-star customer reviews. These things are typically an indication that the company is legitimate. Companies like U.S. Tax Shield have tax resolution attorneys that are well-versed in customer service best-practices, and they have years of industry knowledge to offer their customers. When resolving your tax debt through U.S. Tax Shield, you will receive tailor-made advice that is based on your specific situation and financial circumstances.
Keeping great records for your business and following a business plan that outlines your financial goals is the best thing you can do to encourage best business practices for years to come. These steps may even prevent tax debt down the road as well as a potential audit.
Contact U.S. Tax Shield today. Our tax resolution lawyers are standing by to help you clear your IRS debts.