New "business" question..

What do you anticipate doing in BBQ? Just competing, catering, opening a restaurant, selling rub and sauces, etc?

One of the main aspects of setting up yourself as a business is how much risk you are exposing yourself to. If you have a lot of assets to protect, the more like a business you may need to be.

Federal Income tax wise, if you are just competing, then you can offset your hobby income with your hobby expenses. Unless you are REALLY good, your hobby losses will exceed your hobby income.

State sales tax wise, you may have to register with your state to collect and remit sales tax if you are selling items to the public, although most states don't collect sales tax on food items.

If you just want to get a business license to gain access to suppliers like Restaurant Depot, I would put yourself under catering.

You can't hide anything. If you think you can keep taking losses, that is as good as waving a flag for an audit. If you are doing it for legit business reasons, I would talk with a professional.

Scottie said:

You can't hide anything. If you think you can keep taking losses, that is as good as waving a flag for an audit. If you are doing it for legit business reasons, I would talk with a professional.

Click to expand...

Shoot, I was hoping to buy a motor home like the big stars and write it off as my office...:shocked:

Hey, folks can do whatever they want. Sorta like the IRS.

When I was searching for info in this subject on both this and the vending/catering sub forum, I discovered information that ranged from informative and helpful to straight up advice that suggested strategies that are against the law. The best answer to respond by asking you a question. Do you think it is smart to take financial advice from the internet? >)

Seriously, there are many ways to make competition BBQ a business and your options are dictated by your overall financial situation and your individual/business tax filing strategy. What works for some may not be appropriate for you, even if your situation "sounds" similar.

The best advice is to talk to a real CPA, and not a retired CPA that works at some seasonal tax franchise. I live by a rule when it comes to financial decision making...if I can't sue them for bad advice then I don't take their advice. Too much at risk even for a poor (financially) guy like me.

Specifically, I own a competition team that does a small amount of legit vending and also sell promotional advertising through our BBQ endeavors. I combine all of these activities together under a separate "schedule c" because that is how my accountant set things up.

I will say this. When I first talked to my tax guy I was thrilled when his response was that he had to do some research before advising on how to proceed. I gave him some info that I printed from these forums but in the end he advised me on what to do.

Advice can be found anywhere. The problem is we tend to buy-into the advice we want to hear, so often even when the accurate advice is in front of us, the advice we take is WRONG.

You can go, pay CPA's, etc. However, it's really not tough in this situation. Run a few searches, etc. You should find:

Simply put: Schedule C. http://www.irs.gov/pub/irs-pdf/f1040sc.pdf


If you're not selling Q and sauces, etc. and just worried about BBQ winnings, it's a hobby like any other, your monies invested in it are offset directly to (and ONLY to) the winnings.