When does selling frags become a business?

[TheReefKeeper]

IMO It's a business when you don't have a Job! Or when you sell coral to pay all your bills and feed yourself and your family.

I mean if you don't report your income from your job that's a whole other topic.

 

[Reefs and Geeks]

Alot of good points in this thread. Seems the just is regarding income, anything over $600 SHOULD be reported to the IRS as income even if just doing it as a hobby. Seems many people decide not to report the income from their reefing hobby (or other hobbies) which I get. Sort of like speeding...if you're going 5 over the limit, you're technically speeding and breaking the law but that doesn't mean you will actually be getting a ticket for going 5 over.

As far as sales taxes are concerned, I guess that would be a state to state thing so a bit tougher to get accurate advice from a national/global site. Likely the same story tough. If you're selling a ton, you'd be at high risk for not collecting sales tax, and if you're just selling a few frags here and there or do a yearly swap than you'd be at very low risk.

I guess the question was originally intended for income and sales tax purposes, but the real indicator of it being a business would be if you are registered as a business. There would be some benefits to that like being able to write off investments you make and protection from liability you'd get if you had it set up as an LLC. There's also the downside of the upfront costs of registering your business and setting up tax collection...etc. Personally, I'm not there yet, but do hope to get to that point. For now I'll just sell as a hobbyist and keep close track of my expenses and incomes from the hobby and see how the numbers turn out. Because I've been reinvesting all of my frag sales back into my tank I'd be at a net income of $0 now anyways, but hoping to actually make some level of profit for this year.

 

[ClaysCorals]

I have recently taken the leap and am in the late start up phase of opening my business.
I have a tax resale license and am able to buy wholesale. So far I’m still in the red, but I’m excited to see what is in my future!! I’d like to travel around and sell at swaps throughout the country. So far I Have 3 shows booked through May. I think the business factor all just depends on what level you want to take it to!