Tax optimization turning your hobbies into a business

When it comes to starting a business it can often be very intimidating to get started due to the various costs. My goal is to help you understand how little work it can be and how much money you could save:

First, it’s important to understand that businesses will have some costs such as a registration cost with your state of around 150$; however, if you start up a company that does what you love, the savings can be massive for example:

if you like making music you can start up a music LLC and all of your newly purchased recording equipment can be written off which will allow you reduce your income by the amount you spend saving 20-40% of the cost you spend.

If you’re a gardener at heart you can start up a small hobby farm inside or outside your house and write off things such as the plants, soil, etc

Another example might be if you in the it industry and would like to get into coding; you can start up a LLC and buy things such as your work computer and write it off on your taxes

So to give you a better example of the savings imagine that you spend about $20,000 a year on your various hobbies, that could lead to savings of between $4000-$8000.

You can also take advantage of a home office expense; though that can make things a bit more difficult to calculate.

Here’s the site where you can find your state’s business registration page

Find where you should register your business
(after clicking your state search for business registration)

Example of Registering a business in Minnesota

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