A lot it up here when it comes to tax and financial laws really is Ouija-board witchcraft !!
..."If it's Thursday and the sun is shining and there are exactly 3 clouds showing its legal, but if its Tuesday and last Saturday had a full moon then its not" type of thing.
I am doing roughly the same thing with setting up the wood shop..Even though I can make a living at that type of product, the REAL goal is to build up a fully-equipped multi-discipline shop for my future plans. If I just go and start buying the stuff its with after-tax dollars it will take forever and cost a fortune. If I set up as a legal home business then the tools and equipment are a write-off against the income, and SO is the percentage (and I can make it a lot) of the home used exclusively in the business. PLUS any "toys" buy myself (within reason) can be treated the same way so long as they are legitimately needed to run the business. (A new gun becomes a "staging item" for photographing my new model of hidden storage coffee table). So long as the table is on the website and offered for sale its legal. Dont give a damn if I ever sell one, I got my new gun at essentially 1/2 price or less....If I wait until its on sale AND use it in the business, I got that $200 plinker for about 30-40 bucks out-of-pocket.
Remember, we are under a 50-60% aggregate tax rate up here. We loose 1/2 or more of what we make. Most of us (the smarter ones anyway) find ways to get the stuff they want or need with pre-tax dollars. Its almost like doubling your income. Guys with alimony or support payments are even worse off, since they pay THAT with after-tax money they are left with about 20-25% of their salary to live on. That's when its time to get REAL creative about bringing the taxable income below $12,000/year. Since support is on a sliding scale here based on income, below the 12k mark its considered too low to pay anything.
PLUS Revenue Can's rules are a little lax to simplify things. Anything under about 500-600 bucks per item you DONT have to amortize, just deduct it in the year you bought it. ESPECIALLY if you bought it used/refurbed.
NEXT month, I have to figure out how I can show a new tonneau cover as a legitimate need for remote admin work.
DAMN baby boomers and their scheming for new truck parts !!!
The WHOLE trick is to stay away from loans, grants, investors (in general, other peoples money) ect and use 100% your own. THAT way you are not likely to have any future problems. Its basically the Amish business model. Things TAKE longer but cost a LOT less in the long haul. It's not week-to-week or month-to-month thinking, its 5 and 10 year thinking....and if they did away with income tax and the "rules" altogether, you would probably see a 60+% drop in the number of part-time small business here. There would be no point in doing it. NOBODY really believes you set up a business making 2hr/$15 bracelets and necklaces to earn a living or make money do they ? 7 bucks an hour, 5 after materials ? 1/3rd of minimum wage ? YEH, that's legitimately to make money and earn a living.
[This message has been edited by MidEngineManiac (edited 05-15-2019).]