I am just thinking out loud here...
About when my first Hobby was filed as a business...

As I contemplate the revenue that is being created as I expand my current hobbies, and the variety of perspectives opportunities, and implications of said "productivie play"... I think back to when I was the CEO of a small corporation I founded around my hobbies.

My accountant advised me that if my income reaches more than a certain level a year, The current Tax Code requires I file taxes. This was years ago when I turned one of my hobbies into a for profit business. I think it was like $5000 a year of actual income or "NET" income, or something, you can talk to your accountant for your specific 'Hobby"

So This is how I understand what my account told me. If you spend $10,000 (or any amount) in a year, No Tax filing requirement (according to my accountant back in the day) . If you Have more than $5000 left at the end of the year doing your hobby, the then Tax code requires you to file. OK, No worries, make more than you spend, file for taxes...

This is where my accountant explained how it was an ADVANTAGE for me to file my business BEFORE I Generate any revenue, or income. And this is where business really started to amplify the fun for me....

With a business entity, I was able to claim ALL costs of my hobby against any revenue, AND my PERSONAL INCOME. I could buy whatever I NEEDED to do my HOBBY as a business and it would become a BUSINESS INVESTMENT.

Eventually, MY HOBBY started covering ALL the EXPENSES of doing my hobby... Because I was now "OPERATING A BUSINESS" and had the FREEDOM to DO WHAT I WANTED, practically anytime I could, In fact my business REQUIRED that. 🙂

I kind of understand it like this.
Almost any hobby or business requires at least bit of travel, right. At least for me it does... So a vehicle, gas, maintenance, lodging, food (under some circumstances). Things like equipment, any labor (Contracted or employee), a place for the hobby as a business to take place in in, and other hobby specific expenses are included. I was able to include TRAINING and ALL THE Supplies to do WHAT I LOVE to do (WITHIN LIMITS). I just brought all the documentation to my accountant.

As a business, these were actually recorded as EXPENSES.
I have to mention this again. BEFORE I even Generated the first 1$, I filed these costs as "Expenses" of the biz and as Investments my Personal Income Taxes, I know I am repeating myself, but this is EXCITING.

My Hobby became a WRITE OFF on my personal INCOME TAX.

That means I got to keep more of my earned income just for doing my HOBBY as a BUSINESS.

Now I am not an Accountant, and always insist on having an accountant do any accounting for any businesses I have, with any partners, in any locations. Each country, state, region, county,or town will have different code requirements, fees and taxes for various businesses and industries.

I highly recommend you consult an accountant before, filing a business and have an an accountant you work with while you operate your business.

Ok, so now that that is out of the way, The Gist of it is this, as I can best understand how my accountant explained it...

The IRS and ECONOMY like it when you spend money. They love it when you SPEND MORE MONEY. The Love it even more when you Work to make money to spend more... To make more... to spend more....

You pay Taxes when you BUY things right.... So the more you Spend on your business, you will not only MAKE MORE MONEY for your business, you can KEEP MORE earned Income personally, and you actually end up PAYING your TAXES through sales taxes, Employee Taxes, and other regulatory expenses which also STIMULATES more economic growth.

Even if your Hobby as a business does not make profit, there are still more taxes paid, increased economic growth, and Increased personal wealth for YOU...

So Doing your Hobby as a Business really is a Win-Win-Win-Win proposition... If you have more to invest into your business, your customers will win with your BIGGER and BETTER Business (that we ALL know is really your HOBBY or Passion).

So these thoughts I am having are evoked because I am currently enjoying a new hobby , with a friend, and we are starting to consider investing into our hobby,. It has actually already generate revenue...

So the question now becomes....

WHAT kind of Business should we form???

A "agreed partnership" in where we file any respective revenue or expense through our personal income reports, And/or any sole proprietor business we may have or decide to file..

Do we File formal Partnership papers and get a new Tax Identification Number Is it LLC, or S/C/Non-Profit Corporation???, What about structure, value, shares, ownership, stake, private investors, roles and responsibilities (As far as a internal company structure).

Where do we file our new company? My city, his city, the county, the state? Can we create an organization out of state.

How can we optimize our, Hobbying, so we are not increasing LIABILITIES and lowering our Costs and expenses...

Anyway I digress... I am very excited to share what I know with people and help them develop and refine their ideas, visions, strategies, actions, processes, and plans.

This "Mysterious Partner" of mine is JEREMY LASMAN. and this hobby is, Manifesting IDEAS to MARKET. We Co-Created the website Empower The Imagination , Started doing a Semi-Regular Livestream/Podcast, Built out the system to do E-commerce, Developed and deployed our first Product with PROOF of CONCEPT and Proof of VIability, and are in the development of a EVERGREEN PRODUCT as of the writing of this post...

By using Productive Play, we have been able to stick to our MOTTO, No Burnout, only FLOW. We have discovered it is not only simple to develop and deploy our ideas, but really not that difficult for us to HELP people do the same thing with their ideas. People are willing to pay for myself and Jeremy to go on these "BUSINESS ADVENTURES" with them, as guides and Sherpas of sorts.

So I need to send him a quick text asking him what he thinks about turning our HOBBY into a BUSINESS . That should not take but a quick moment to ask...

"What is the Best option to file expenses and revenue from our Hobby that is a business" ?

Heck, he might suggest something like filing as a Church or something... There are advantages and disadvantages to each structure...

I love talking about this sort of thing. Shoot me a text, or shoot me a call, and we can talk about it all.... Turning HOBBIES into BUSINESSES has got to be one of my FAVORITE HOBBIES. I look forward to talking BUSINESS with you... (And we all know well and good, I really just want talk about my hobby...

Thanks again for checking out my random thougts on my personal blog... and be sure to follow all my PROJECTS and FAVORITE Social media and Business Profiles. Happy Hobbying.




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