question for scrapping "hobbyists": how to pay less taxes?

[ilyaz]

I guess this question is intended primarily for people who has been scrapping as a "hobby with benefits" i.e. using scrapping as a secondary source of income: What do you do when it's time to file your taxes, and what do you do give less to Uncle Sam -- legally? Is it possible to open some type of business entity and get some tax benefits from that, even if these benefits are only for the 1st year or two or three? Do you have to generate a certain minimum amount of $ from your scrap to make opening such entity either legal or worthwhile? Any other suggestions?

Thanks!

[Thogey]

I have an Al can scrapping operation, as many of you know.

The operation looses money every year,that is written off against other income.

My cans are generally acquired in groups of 30. My yard will not accept them unless they are used/emptied.

The cans cost about $20.00 for a group of 30, and it takes time and effort to empty them. They are always sold at a loss.
I can even write off the portion of my house that is used to store and process the UBCs.

What I need is a employee who I'd enjoy emptying them with (commission work).

Well it's a dream anyway, How the hell can I write off the cost of beer if I'm the end user.

[messymessy]

You really don't need any type of business entity to take advantage of deducting legitimite business deductions. Use a schedule C with your 1040 to declare your income and expenses.

A few of the obvious things you could deduct would be vehicle mileage when you drive to the scrap yard or drive to pick up things. You could also deduct any related tools or machinery that you buy to process scrap.

[Dr. Cadmium]

Set up an appointment with a CPA in your home state. They can answer all of your questions regarding taxes, particularly whether or not it makes sense to open a business (which varies greatly by state).

[Treasurekidd]

Hey Thogey, your post killed me! I'm a Sam Adams guy - can you teach me how to apply your business model to 24 glass bottles at a time?

[Thogey]

Hey Thogey, your post killed me! I'm a Sam Adams guy - can you teach me how to apply your business model to 24 glass bottles at a time?

Sam Adams operation won't work. It will raise too many red flags at the IRS.

[Lemon Thrower]

i usually drink bottles but of course the caps are steel. hmmmmmmmmmmm