Where to start? Backyard to farm in NC

[MissTracy]

Hey guys!
I have a small farm in NC, and my husband and I are purchasing two adjoining acres in order to increase our farm to the 5 acre minimum for NC state tax breaks.
If you have seen my posts before, you know I have anywhere from 100 to 150 chickens and guineas at a given time. I do sell eggs as well as hatching eggs and chicks, the occasional rooster, and expanding this year (rapidly) to include produce from our garden.
I am trying to figure out if I need to start a receipt system, incorporate, or even buy insurance for my backyard business. I know I can claim the $500 as cash income on my taxes, but looking to see what else needs to be done to be ‘legit’. All comments and suggestions are welcome!
We are also thinking of doing bees/honey and possibly goats in the near future.
Thank you for your help!!!

 

[Stipenvlerk]

Hey guys!
I have a small farm in NC, and my husband and I are purchasing two adjoining acres in order to increase our farm to the 5 acre minimum for NC state tax breaks.
If you have seen my posts before, you know I have anywhere from 100 to 150 chickens and guineas at a given time. I do sell eggs as well as hatching eggs and chicks, the occasional rooster, and expanding this year (rapidly) to include produce from our garden.
I am trying to figure out if I need to start a receipt system, incorporate, or even buy insurance for my backyard business. I know I can claim the $500 as cash income on my taxes, but looking to see what else needs to be done to be ‘legit’. All comments and suggestions are welcome!
We are also thinking of doing bees/honey and possibly goats in the near future.
Thank you for your help!!!

I don't know about your local tax, but honeybees would be so great! You will love it!
A side note, the wild bee has a way tougher life than the honey bee. So if you are able to provide a little safe heaven for them with sand, small pieces of wood and wild vegetation they would be so grateful....

 

[U_Stormcrow]

I've done this (MUCH smaller scale) just recently in Florida. This is NOT meant to be Tax Advice. Neither is it meant to be Legal Advice.

I recommend (because its what I chose to do, as seemingly best for me) forming an LLC (Limited Liability Company) to shelter your personal assets from claims against the business, and register same with the State. My wife and I chose to do so in her name as primary owner - its a woman owned business, which has certain potential advantages. I am set up as a managing owner. I also obtained a Federal EIN, though we have no employees, to hide our Social Security numbers from public view, allowing us to transact all business under than number instead. I then obtained a Florida State Tax ID for the payment of sales taxes, etc.

Then, all necessary licenses for raising and selling shell eggs, hatching eggs, etc were obtained in the business name. I reached out to the local Farm service and registered the Farm with the Federal Gov't as well, obtaining a Parcel ID - which I'll need if I ever try to use a USDA grant or loan. Signed up with NPIP, and voluntary reporting, so I have a window on any livestock affecting outbreaks in my area.

Created a separate ledger to track business income and expenses, and began by transferring a number of assets into the business name at market value. Chickens, Ducks, Feed, Incubators, misc equipment, etc. Also leased a few acres of my property to the business at the average annual rate, which you can look up for your area (it ain't much).

Then set up the business with Google so it appears on Maps, and has its own email address.

Talk with your insurance carrier about supplemental insurance coverage, and check your riders for exclusions related to commercial use of your property.

Finally, I still need to set up a bank account to transact in the business name, primarily for the payment of sales taxes and the filing of annual reports required to maintain the LLC. In my case, I can pass any profits of the LLC through to my personal taxes - but whether you can (or should) do so or not is Tax Advice, which I'm not giving.

Hope that helps!

 

[MissTracy]

I've done this (MUCH smaller scale) just recently in Florida. This is NOT meant to be Tax Advice. Neither is it meant to be Legal Advice.

I recommend (because its what I chose to do, as seemingly best for me) forming an LLC (Limited Liability Company) to shelter your personal assets from claims against the business, and register same with the State. My wife and I chose to do so in her name as primary owner - its a woman owned business, which has certain potential advantages. I am set up as a managing owner. I also obtained a Federal EIN, though we have no employees, to hide our Social Security numbers from public view, allowing us to transact all business under than number instead. I then obtained a Florida State Tax ID for the payment of sales taxes, etc.

Then, all necessary licenses for raising and selling shell eggs, hatching eggs, etc were obtained in the business name. I reached out to the local Farm service and registered the Farm with the Federal Gov't as well, obtaining a Parcel ID - which I'll need if I ever try to use a USDA grant or loan. Signed up with NPIP, and voluntary reporting, so I have a window on any livestock affecting outbreaks in my area.

Created a separate ledger to track business income and expenses, and began by transferring a number of assets into the business name at market value. Chickens, Ducks, Feed, Incubators, misc equipment, etc. Also leased a few acres of my property to the business at the average annual rate, which you can look up for your area (it ain't much).

Then set up the business with Google so it appears on Maps, and has its own email address.

Talk with your insurance carrier about supplemental insurance coverage, and check your riders for exclusions related to commercial use of your property.

Finally, I still need to set up a bank account to transact in the business name, primarily for the payment of sales taxes and the filing of annual reports required to maintain the LLC. In my case, I can pass any profits of the LLC through to my personal taxes - but whether you can (or should) do so or not is Tax Advice, which I'm not giving.

Hope that helps!

Thank you so so much! I was thinking LLC and receipts and insurance, but wasn’t sure where to start.
You have helped me convince my husband that incorporating is the way to go. Also, no worries, we will submit through our accountant any final moves/decisions for advice.
Cheers!

 

[MissTracy]

I don't know about your local tax, but honeybees would be so great! You will love it!
A side note, the wild bee has a way tougher life than the honey bee. So if you are able to provide a little safe heaven for them with sand, small pieces of wood and wild vegetation they would be so grateful....

We leave a good portion of clover groundcover flowering, and oh if I had the time to tell you about my flowers... hundreds of feet of heritage climbing roses, butterfly bushes, honeysuckle, blackberries, our garden that’s close to an acre; our bees are happy. The trees in our yard buzz in the spring. It’s crazy.