Author Topic: Going Semi-Pro?  (Read 1891 times)

Offline Drewch

  • Brewer
  • ****
  • Posts: 259
  • Just this guy, you know?
    • The Malt Bug
Re: Going Semi-Pro?
« Reply #15 on: June 04, 2021, 10:08:58 pm »
I'm neither a lawyer nor an accountant but...

You'd definitely want to incorporate properly and follow proper accounting practice.  The IRS and TTB aren't going to care how "casual" your business is.
The Other Drew

The Malt Bug Homebrewery - brasserie, cidrerie, hydromellerie - since 2019.

Offline denny

  • Administrator
  • Retired with too much time on my hands
  • *****
  • Posts: 24839
  • Noti OR [1991.4, 287.6deg] AR
    • Dennybrew
Re: Going Semi-Pro?
« Reply #16 on: June 04, 2021, 10:26:59 pm »
I am looking at having a 1-bbl system that I would brew one or two days per week.  Yes, that's only 50-100 bbls per year production. But with limited overhead like that, why can't I just serve ~1bbl per weekend while hanging out with locals/travelers "reminiscing about the old times" and making a few thousand bucks a year?


Sounds like my dream "job"!

In general, the IRS likes to see an honest profit motive behind any business, but I think this applies only if you claim business losses on your tax return to offset other income sources.

You'll definitely want to consult an accountant to determine where a casual, "profit isn't really important" business stands in the eyes of the IRS.

That is excellent advice.
Life begins at 60.....1.060, that is!

www.dennybrew.com

The best, sharpest, funniest, weirdest and most knowledgable minds in home brewing contribute on the AHA forum. - Alewyfe

"The whole problem with the world is that fools and fanatics are always so certain of themselves, and wiser people so full of doubts." - Bertrand Russell

Offline tommymorris

  • Official Poobah of No Life. (I Got Ban Hammered by Drew)
  • *********
  • Posts: 3216
Re: Going Semi-Pro?
« Reply #17 on: June 05, 2021, 02:31:11 am »
I’ve always thought it would be nice if homebrewers (or pros) could sell singles or six packs at the local farmer’s market. I have seen other small businesses (like bakeries) start that way and build a following. But the fees to be a pro brewer are too high to make it viable.

Offline Drewch

  • Brewer
  • ****
  • Posts: 259
  • Just this guy, you know?
    • The Malt Bug
Re: Going Semi-Pro?
« Reply #18 on: June 05, 2021, 04:37:44 am »
I’ve always thought it would be nice if homebrewers (or pros) could sell singles or six packs at the local farmer’s market. I have seen other small businesses (like bakeries) start that way and build a following. But the fees to be a pro brewer are too high to make it viable.

+1.
The Other Drew

The Malt Bug Homebrewery - brasserie, cidrerie, hydromellerie - since 2019.

Offline StormCrow

  • 1st Kit
  • *
  • Posts: 6
Re: Going Semi-Pro?
« Reply #19 on: June 05, 2021, 01:37:46 pm »
I am looking at having a 1-bbl system that I would brew one or two days per week.  Yes, that's only 50-100 bbls per year production. But with limited overhead like that, why can't I just serve ~1bbl per weekend while hanging out with locals/travelers "reminiscing about the old times" and making a few thousand bucks a year?


Sounds like my dream "job"!

In general, the IRS likes to see an honest profit motive behind any business, but I think this applies only if you claim business losses on your tax return to offset other income sources.

You'll definitely want to consult an accountant to determine where a casual, "profit isn't really important" business stands in the eyes of the IRS.

I can't pay you, but you'd be welcome to come hang out and drink beer!

Well, I don't plan on actually losing money.  I just don't plan on making more than $5,000-$10,000 per year as a retirement "job".

In the experience gained from my former career as a payroll accountant, the IRS doesn't care about "how important profit is", as long as you actually show profit under the 5 or 7 year rule.  I don't plan on actually showing any losses, other than possibly the first couple of years of setting up the place.

Offline Thirsty_Monk

  • Brewmaster General
  • *******
  • Posts: 2464
  • Eau Claire WI
    • Lazy Monk Brewing
Re: Going Semi-Pro?
« Reply #20 on: June 06, 2021, 02:12:55 am »
I am just going to say this and leave it there.

When you home brewing or home making mead you are at your leasure that and when you make it.

When you are brewing professionally you have to meet customers expectations. Your preference does not necessarily matter any more.

Brewing is a young person job. I have been doing it for 11 years and I am happy with my brewery. But it is a lot of work and if I want to make more money I would work for someone else.
Na Zdravie

Lazy Monk Brewing
http://www.lazymonkbrewing.com

Offline nateo

  • Brewmaster General
  • *******
  • Posts: 2326
Re: Going Semi-Pro?
« Reply #21 on: June 06, 2021, 09:09:13 pm »
The safe harbor under 183(d) isn't at helpful as it appears. You're going to butt up against the hobby loss rules. Basically all of your income will be taxable but none of your expenses will be deductible.

I would expect an operation like that to lose a fair amount of money each year, but vanity projects can be great fun if you have the money to burn.
In der Kürze liegt die Würze.

Offline hopfenundmalz

  • Global Moderator
  • I must live here
  • *****
  • Posts: 10284
  • Milford, MI
Re: Going Semi-Pro?
« Reply #22 on: June 06, 2021, 11:58:09 pm »
I am just going to say this and leave it there.

When you home brewing or home making mead you are at your leasure that and when you make it.

When you are brewing professionally you have to meet customers expectations. Your preference does not necessarily matter any more.

Brewing is a young person job. I have been doing it for 11 years and I am happy with my brewery. But it is a lot of work and if I want to make more money I would work for someone else.
I still have to visit again when you are there!
Jeff Rankert
AHA Lifetime Member
BJCP National
Ann Arbor Brewers Guild
Home-brewing, not just a hobby, it is a lifestyle!

Offline Thirsty_Monk

  • Brewmaster General
  • *******
  • Posts: 2464
  • Eau Claire WI
    • Lazy Monk Brewing
Re: Going Semi-Pro?
« Reply #23 on: June 07, 2021, 12:34:40 am »
I am just going to say this and leave it there.

When you home brewing or home making mead you are at your leasure that and when you make it.

When you are brewing professionally you have to meet customers expectations. Your preference does not necessarily matter any more.

Brewing is a young person job. I have been doing it for 11 years and I am happy with my brewery. But it is a lot of work and if I want to make more money I would work for someone else.
I still have to visit again when you are there!
I am sorry I missed you last time. Let me know when you plan to be around next time. You can use brewery contact form for that. Thank you
Na Zdravie

Lazy Monk Brewing
http://www.lazymonkbrewing.com

Offline hopfenundmalz

  • Global Moderator
  • I must live here
  • *****
  • Posts: 10284
  • Milford, MI
Re: Going Semi-Pro?
« Reply #24 on: June 07, 2021, 12:45:09 am »
I am just going to say this and leave it there.

When you home brewing or home making mead you are at your leasure that and when you make it.

When you are brewing professionally you have to meet customers expectations. Your preference does not necessarily matter any more.

Brewing is a young person job. I have been doing it for 11 years and I am happy with my brewery. But it is a lot of work and if I want to make more money I would work for someone else.
I still have to visit again when you are there!
I am sorry I missed you last time. Let me know when you plan to be around next time. You can use brewery contact form for that. Thank you
will do that
Jeff Rankert
AHA Lifetime Member
BJCP National
Ann Arbor Brewers Guild
Home-brewing, not just a hobby, it is a lifestyle!

Offline StormCrow

  • 1st Kit
  • *
  • Posts: 6
Re: Going Semi-Pro?
« Reply #25 on: June 07, 2021, 01:11:00 am »
The safe harbor under 183(d) isn't at helpful as it appears. You're going to butt up against the hobby loss rules. Basically all of your income will be taxable but none of your expenses will be deductible.

I would expect an operation like that to lose a fair amount of money each year, but vanity projects can be great fun if you have the money to burn.
I'm not seeing your point.
Just don't show a paper loss for 2 out of 5 years.
But I'm not actually planning on having an actual loss, let alone a paper one.
I own the building. I own the equipment. I'm not paying employees. My expenses are ingredients and utilities.

Offline nateo

  • Brewmaster General
  • *******
  • Posts: 2326
Re: Going Semi-Pro?
« Reply #26 on: June 07, 2021, 01:36:18 am »
The safe harbor under 183(d) isn't at helpful as it appears. You're going to butt up against the hobby loss rules. Basically all of your income will be taxable but none of your expenses will be deductible.

I would expect an operation like that to lose a fair amount of money each year, but vanity projects can be great fun if you have the money to burn.
I'm not seeing your point.
Just don't show a paper loss for 2 out of 5 years.
But I'm not actually planning on having an actual loss, let alone a paper one.
I own the building. I own the equipment. I'm not paying employees. My expenses are ingredients and utilities.

Well people usually value advice at cost, so I suggest paying a CPA if you don't like my free advice.
In der Kürze liegt die Würze.

Offline RC

  • Brewmaster
  • *****
  • Posts: 601
Re: Going Semi-Pro?
« Reply #27 on: June 07, 2021, 02:59:41 am »
The safe harbor under 183(d) isn't at helpful as it appears. You're going to butt up against the hobby loss rules. Basically all of your income will be taxable but none of your expenses will be deductible.

I would expect an operation like that to lose a fair amount of money each year, but vanity projects can be great fun if you have the money to burn.
I'm not seeing your point.
Just don't show a paper loss for 2 out of 5 years.
But I'm not actually planning on having an actual loss, let alone a paper one.
I own the building. I own the equipment. I'm not paying employees. My expenses are ingredients and utilities.

Sounds like you had things already figured out before your post. So what specific advice/responses/thoughts were you looking for? Were you seeking devil’s advocacy or confirmation bias?

Offline StormCrow

  • 1st Kit
  • *
  • Posts: 6
Re: Going Semi-Pro?
« Reply #28 on: June 07, 2021, 01:04:01 pm »
The safe harbor under 183(d) isn't at helpful as it appears. You're going to butt up against the hobby loss rules. Basically all of your income will be taxable but none of your expenses will be deductible.

I would expect an operation like that to lose a fair amount of money each year, but vanity projects can be great fun if you have the money to burn.
I'm not seeing your point.
Just don't show a paper loss for 2 out of 5 years.
But I'm not actually planning on having an actual loss, let alone a paper one.
I own the building. I own the equipment. I'm not paying employees. My expenses are ingredients and utilities.

Sounds like you had things already figured out before your post. So what specific advice/responses/thoughts were you looking for? Were you seeking devil’s advocacy or confirmation bias?
I was looking for input exactly like nateo gave.  Reasons why people say it shouldn't be done, that I may not have planned for already. Both devil's advocacy AND confirmation bias, I guess.

Offline StormCrow

  • 1st Kit
  • *
  • Posts: 6
Re: Going Semi-Pro?
« Reply #29 on: June 07, 2021, 01:12:04 pm »
The safe harbor under 183(d) isn't at helpful as it appears. You're going to butt up against the hobby loss rules. Basically all of your income will be taxable but none of your expenses will be deductible.

I would expect an operation like that to lose a fair amount of money each year, but vanity projects can be great fun if you have the money to burn.
I'm not seeing your point.
Just don't show a paper loss for 2 out of 5 years.
But I'm not actually planning on having an actual loss, let alone a paper one.
I own the building. I own the equipment. I'm not paying employees. My expenses are ingredients and utilities.

Well people usually value advice at cost, so I suggest paying a CPA if you don't like my free advice.
I did not intend for my reply to you to sound snooty, and I'm sorry if I came across that way. I was just explaining my thought process.
Plus, I already stated that I spent a whole career as an accountant. Specializing in payroll, but partnership 1065 returns and personal 1040 returns as well.
I know I'm not going to make much money, and I'm going to make sure not to lose enough money on paper that jeaprodizes my ability to still say this is a business.
I was hoping for some real experience of "I turned a hobby I love into a job I hate" kind of thing.