Skip To Content

Licenses, Fees, and Taxes For Chicken Owners and Homesteaders

Licenses, Fees, and Taxes For Chicken Owners and Homesteaders

Owning chickens can be an easy way to provide your family or homestead with a steady supply of protein, but getting the room and resources to raise hens can involve quite a financial investment. Fortunately, not only are there many ways to save when rearing chickens, there are also ways for you to make money off of them if you have enough. One of the easiest ways to do this is to make yourself into a small business and claim tax breaks, but this often requires various licenses and fees, depending on your state. What are some legal documents you will need to raise and make money off your chickens?

Sole Proprietorship

Even if you don’t make much money from selling eggs, it could benefit you to form a sole proprietorship for your poultry operation. A sole proprietorship is easy to create and less regulated than other business entities, as it is simply an unincorporated business entity with only one owner. The owner pays personal income tax on profits earned from the business and gets a pass-through tax advantage. You will need to file a “Doing Business As” (DBA) application, which can cost between $5 and $100, depending on your state.

Professional Documents and Certification

Some other documents you may need for a chicken business include a business license and business plan, a tax ID, a certificate of incorporation, and animal care standards. You may also need a Poultry Business Permit. You don’t usually need professional certification to start a poultry farm unless you are handling feeds and vaccines. Homesteaders also may find it beneficial to get a NPIP certification. While this certification is not required, it demonstrates your care and willingness to protect your poultry from harm and disease, and also helps you access a larger network of poultry farmers who care about preventing the spread of disease. However, this certification is usually not required for small homesteaders. You can voluntarily get it by submitting a blood sample from your hens and following biosecurity practices such as using metal containers to store chicken feed and disposing of waste in a hygienic manner.

Insurance

In order to best protect your business investment, you may need to look into certain insurance policies. Some policies you may want to consider include Pollution Liability Coverage, Poultry farm Insurance, and Animal Cruelty Protection. In addition, you may want insurance that covers you in the event of an equipment breakdown. If you have employees or any interactions with the general public, you may also want to look into Workers’ Compensation and General Liability insurance policies. You will want to make sure you protect your animals from disease outbreak or unsanitary conditions, and insurance can help cover you in the event of a disaster that wipes out your flock.

Taxes

Taxes can be complicated, though they are much simpler if you are operating your poultry homestead as a sole proprietorship. Even if you do not make much money off of your hens, the act of declaring yourself a business and showing your intent to make money will allow you to access many tax write-offs. Make sure that you can prove that your business is a business and not simply a hobby, however. You will need to make sure you get a Tax ID (and if you have any employees, an Employer Identification Number, or EIN). As a sole proprietor, you will pay taxes on all your business income by using Schedule C on form 1040. Take the time to tally and track your expenses so you can ask for business deductions! Some expenses include: auto expenses, including, insurance, labor, legal fees, property tax, supplies, utilities, and even computer or bank fees. It is very important that you keep your personal and business expenses separate. One of the easiest ways to do this is to open a business bank account. If you are at all worried about filing your taxes, take your time to contact a tax attorney or lawyer or a CPA for help. It’s important that you do your taxes legally and honestly.

These are just some legal and tax documents that you will need if you are a homesteader looking to financially benefit from your poultry. Keeping these things in mind will be sure to help you as tax season approaches. Look into sole proprietorships, organize and obtain business documents, get insurance, and keep your finances in order for tax season. By following these tips, you and your chickens will be sure to enjoy a long partnership.

By Deborah Goldberg

Article and Photos Courtesy of LandBrokerMLS.com

Trackback from your site.

Leave a Reply

*
*