Selling Firewood- Hobby or Business?

[Vortec-Z71]

So a few years ago I found I could make some money selling firewood after we cleared land at my house. I have since grown the hobby and do 15-20 cords over the course of the year at the most between hardwood in the winter and pine as campfire wood in the summer. It's just supplemental income as I go to school full time. At what point do I have to register as a business? Specifically, is there a certain volume of wood or income level where it is no longer considered a hobby (I live in Massachusetts). I just want to make sure I am operating legally.

 

[T. Mainus]

Cash is king. Just saying. The government gets enough of my money. Only 15-20 cords a year. I wouldn't lose any sleep over that.

 

[Streblerm]

Technically any income should be voluntarily reported and taxes should be paid. As far as I know there is no exemption for hobby income. I won't tell though

 

[jrider]

Accept cash and don't piss anyone off. Follow that and the amount shouldn't matter for you to fly under radar.

 

[MountainHigh]

ya, technically the gov wants their pound of flesh as soon as you earn any nickel.

I know this isn't what you are really asking, but the pluses of making it a real business are you get to write off expenses such as saw, gas, truck, bookkeeper, desk, phone, computer (or a portion thereof) etc, etc that is IF you plan on making a profit at some point ... governments don't like perpetual losers in business and will question write offs if you show only losses ongoing for a number of years. There's also the advantage (but likely remote in this case) if you get big enough to warrant it, you can shield liability by incorporating. Technically if you screw up on a job and someone sues you, all your assets are vulnerable if you are not incorporated. If you have no assets, well then bob's your uncle.

The Minuses however are significant beginning with paperwork, taxes, paper work, submitting taxes, insurance, paperwork, employee taxes, worker comp, more insurance, more taxes Think twice before you start a real business.

While we still don't yet have RFID chips embedded in our arms and there is still some paper cash money in circulation, I'd far prefer cash.

 

[philoshop]

On the flip-side, declaring it as a business w/ the IRS means you can probably write off the 'toys' as a business expense. You have to be prepared to prove that you have the knowledge and intent to eventually make it profitable if you're ever asked, but you can show a loss for 3 years. Extra bookkeeping and tax-prep, and you'll have to deal with the state sales tax and other reg's, but it could be worth it if you have the time.

MountainHigh just posted something very similar. I'm not typing too quickly today.
Best of luck!

 

[zogger]

If you stay small, a one man band, it won't be too bad as a legit business, but man, once you start having employees things change radically.

Either stay small, one man band, or go serious whopper full time huge.

 

[Milkweed Seed]

Shhhh

 

[Swamp Yankee]

Under the radar is good

Just pocket the cash and stay quiet,

The gov't, state and federal, have far bigger fish to fry than a guy hawking 15 cords of firewood a year. As soon as you declare as a business the rules change. At this point you're just another guy going down the road with a pickup load of wood not subject to commercial seller rules and regs.

Not sure if Middleboro is in Worcester County or not. If so, you should be far more concerned about transporting out of the ELB quarantine area. The DNR will nail anyone, commercial or private, big time if they catch them moving wood out of the "Beetle Zone".

Take Care

 

[Mike-M]

So a few years ago I found I could make some money selling firewood after we cleared land at my house. I have since grown the hobby and do 15-20 cords over the course of the year at the most between hardwood in the winter and pine as campfire wood in the summer. It's just supplemental income as I go to school full time. At what point do I have to register as a business? Specifically, is there a certain volume of wood or income level where it is no longer considered a hobby (I live in Massachusetts). I just want to make sure I am operating legally.

When youre buying multiple brand new vehicles in 1 year with cash, they might notice. Until then dont worry about it.

 

[jwade]

When youre buying multiple brand new vehicles in 1 year with cash, they might notice. Until then dont worry about it.

haaa dont think he will be buying new vehicles selling firewood....at least i cant