More than just a hobby, a money maker?

[Bapeluso]

I chose other because I wouldnt be making any money. I'd be ordering everything that I want to keep

 

[jlts21]

I would love to! I love this hobby and while there would be stress involved the whole “love what you do and you’ll never work a day in your life” would be true for me

 

[wrasse hole]

Just an FYI as I get the tax break, and write off question often.
This is the most misunderstood part of owning your own business, and most think its a huge benefit to them, trust me its not.


I usually broke even, or got a few bucks back on my taxes until I started my business.
Once I started my business I have had to pay taxes every year since.
I take that back, in 2018, I bought quite a lot of equipment. I got a couple hundred bucks back from the IRS, but, now I had a truck payment, insurance, registration, ETC. That was one year out of 14 in business.

It's not a benefit at all. What he's describing wouldn't be considered a business by the IRS and wouldn't offer any tax advantages. It would be considered income from a hobby, and starting in 2018, you can no longer deduct hobby related expenses from hobby income. If you sell $200 worth of coral, you pay taxes on $200, regardless of how much you've spent on equipment, maintenance, livestock, etc. If you don't report the income from a coral sale on your taxes, you've technically committed tax fraud.

To be able to deduct reef keeping expenses from your total income, you'd need to declare it as a business with the intent to profit. If you're consistently not profiting, the IRS wouldn't consider it a business, and your write-offs wouldn't be eligible.

 

[K7BMG]

It's not a benefit at all. What he's describing wouldn't be considered a business by the IRS and wouldn't offer any tax advantages. It would be considered income from a hobby, and starting in 2018, you can no longer deduct hobby related expenses from hobby income. If you sell $200 worth of coral, you pay taxes on $200, regardless of how much you've spent on equipment, maintenance, livestock, etc. If you don't report the income from a coral sale on your taxes, you've technically committed tax fraud.

To be able to deduct reef keeping expenses from your total income, you'd need to declare it as a business with the intent to profit. If you're consistently not profiting, the IRS wouldn't consider it a business, and your write-offs wouldn't be eligible.

Very true.

The point I may not have made clear in my previous post is so often people think that business tax write offs are some great benefit to the business, or themselves personally.

Some even think that is the main reason to go into business. Like everything the business buys or does is free or something.

That is so NOT the case as you clearly understand, but most don't understand this in the beginning. Most think that they can write off the 600 feet of space in their home office and shop and make the profit margin go from 10% to 15% or something, its crazy.

I tell people using this example.
OK so you owe $50,000.00 to the IRS for taxes.
If you buy a piece of equipment for $100,000.00 you can write off 25%.
So yes now you may only owe the IRS $25K but have had to spend an additional $75,000.00 to do it.
They laugh and say right, until they file the first year of business taxes.
Then they understand as their CPA or tax person explains it to them better than I can.

Hey back in the 60s and 70s a business could write off all kinds of stuff and close to 100% of it. Trips to Hawaii to entertain new clients, every restaurant receipt, ETC.
The IRS grew wise to this and now have virtually stopped all that.

But that thought of tax write off benefit has lingered far to long.

 

[mattdg]

I enjoy sharing / trading coral at reef club meetings and selling the stuff out of my frag system to support the main reef tank. It feels like a good balance.

I've met hobbyists who have slowly built up an inventory of nice, aquacultured coral that they sell for a slight profit over their yearly investment. In my opinion, it's just being smart. I really like the idea of skilled hobbyists propagating coral, even turning it into a side hustle. This is hobbyists being part of the solution, when it comes to coral reef sustainability.

Personally, if I were to grow a reefing business and turn it into a main source of income, it would most likely be a mixture of selling a select list of aquacultured coral and several products of my own design. With that said, perhaps some of the conversation should be about creating a side hustle with a slow but steady investment in reefkeeping skills, equipment, ideas and a business plan that goes along with current lifestyle and our ever increasing level of experience in the hobby.

 

[K7BMG]

Good discussion.
There is a HUGE difference in making it into a real business, Making a living vs selling things to help with the reefing expenses we incur.

The actual question of the day.
HAVE YOU EVER SERIOUSLY CONSIDERED MAKING A LIVING IN THE AQUARIUM INDUSTRY?

Turning the hobby into a business within the industry whether it be livestock or equipment based items calls for a lot of additional work, knowledge, time, and capitol investment. Far more than having a reef or a few frag tanks.

It includes obtaining a business license, resale license, registration with the department of taxation if required in your state, city, county, state, licenses, Liability insurance, Workers comp insurance if you pay someone.

That's why I say nope not for me.
I have enough of that work with my current electrical business.

If I have need to crop corals because they are getting to big for my tank and can be sold here and there yea sure.
But I cant be held liable in this circumstance. The buyer will know this up front.
If someone buys a used return pump from me, and it fails!, again that's not on me as well.
But this is not "Making a Living". This is offsetting the costs and getting rid of unused equipment.

 

[H3rm1tCr@b]

Aw I’ve considered it. I’ve always wanted a little fish shop in Florida it Cali, just don’t know how.

 

[K7BMG]

Aw I’ve considered it. I’ve always wanted a little fish shop in Florida it Cali, just don’t know how.

You can learn, it takes a real desire and real effort though.
What did you know before your first reef?

 

[H3rm1tCr@b]

You can learn, it takes a real desire and real effort though.
What did you know before your first reef?

Not much

 

[Victor_C3]

I’ve thought of eventually getting a few frag tanks and growing a few varieties of corals and selling them in bulk to local LFS in the several major cities around me. I don’t know if I’ll actually make money doing this, but it could be another aspect of the hobby for me to enjoy. As long as I break even, I’ll be happy.

 

[Rilo]

I want to run an aquarium maintenance business. It's the only thing I can do now where I can generate a profit at a low entry cost.

 

[Cthehentz]

I love my hobby, I would hate it as a business. There is a reason my LFS no longer has his own personal tank at home.

 

[Lollipop]

it would be fun but i fear return and income would not be so much. a this time, i consider it to be my second career after retirement.

 

[Indytraveler83]

I worked as an animal control officer for years. My first job as a teenager was the fish dept at PetCo. When live animals are part of your profession, it becomes even more stressful.

I love animals but choose for them to be part of my family only, it's just to much stress for to handle them professionally anymore. The furthest I ever intend to go is trade/swap frags.

I salute those of you who deal with animals as a career. It's not for the light-hearted.

 

[chefjpaul]

Yes...for a minute... can't compete with my salary and I actually get to do what I love...

IF... I could ever get paid roughly the same amount, I would just enjoy doing the builds, not maintenance which is the $$.