In the Know #57

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Breeding Better Dogs Newsletter

Key Takeaway Tax Tips

The filing deadline is three days later this year, April 18 instead of the usual April 15. If you’re planning to write off expenses to a dog breeding business read on:

Cautionary Notes: The tax tips below are taken from Jan Roberg, founder and principal owner of Roberg Tax Solutions in St. Louis, MO. You should know:

  • Dog-related deductions and other write-offs can also be considered a hobby that can trigger a red flag at the IRS. Start with a professional tax advisor.
  • If you breed dogs as a hobby, the income you make when you sell a puppy — is taxable. Don’t be tempted to write off breeding-related business expenses if you have a hobby.
  • Remember, “pets are fun, and any kind of business that looks like fun is more likely to get a second glance from the IRS because it can also be a hobby.”

litter of pups

8 Tax Tips

  • If breeding is your a business, don’t be afraid to write off your expenses. Set up a separate bank account. Make sure that any money that comes in for the business comes into that bank account, and any expenses for the business come out of that bank account.
  • Have a written business plan and a business license as evidence of business intent.
  • Watch the write-off of a dog’s entire purchase price in its first year. Roberg cautions you have to actually be breeding the dog in order to expense its cost, and if you stop breeding it during the seven-year depreciation timeline, you’ll have to reclaim the depreciation for any year you did not breed.
  • Many business expenses can be deducted, from veterinary care, to advertising, to business letterhead. Do not to overlook less-obvious potential deductions, such as a home office (or a dedicated room for your dogs), internet and phone service, show entry fees, and mileage.
  • File electronically, not on paper. About 10% of paper returns get audited. Electronic returns are audited about half of 1%. E-filed returns go through a computer, whereas paper-files are actually looked at.
  • You should make a profit within three years, which is not required  but it helps
  • Keep meticulous records in case of an audit.
  • Keep your records for seven years,

Other Breeder Information

Stick Dog Pedigree Software – you can now code information about the  conformation and health of ancestors using the Stick Dog Pedigree software . It produces three pedigrees.  With a click of the mouse, it will generate the Traditional pedigree with names, titles and certifications, stick figures with seven structural traits of conformation, and a Symbols Pedigree which codes health history, carriers and dreaded diseases. A User Manual provides step by step instructions.

Choosing the Best Puppy – this DVD is based on a study that shows most breeders error about 60% of the time when choosing the best puppy. These are bad odds. What is needed are skills and a reliable method that reduces error. Now available, a DVD that is proven to help with this problem, "Choosing the Best Puppy."

Early Neurologicl Stimulation  (ENS)  This is a new feature that has been added to the “Chosing the Best Puppy” DVD. When you purchase “Choosing the Best Puppy” you get this narrated demonstration as a bonus. ENS is a breeders way to enhance the development of puppies. 

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