Got a question for some of the makers here.
Even though I've been doing pneumag jobs for people for years, I have never started a legal business for my paintball work. I consider it a side hustle, like mowing lawns as a kid. Even though I often charge $300-$400 for jobs, probably 80% of that goes into parts. I started keeping track a few years ago, and on average I don't profit that much...usually less than $1,000/year. I do report that on my taxes, but I haven't done anything else besides that.
All that is about to change, though. Maybe. I'm going to release a MAC-33 pneumag kit soon, probably before summer, and this is going to be significantly different than building pneumags and SPARs for people. The kit is mostly off-the-shelf parts. I'm just acting as a middle-man, gathering the parts in bulk to make it all easier/cheaper, and then reselling everything at a profit. Usually I can only find the time to build about 1 pneumag a month, but since the kit is so much less labor intensive, I could see selling 10 or 20 a month, and that could maybe generate a LOT more money. Maybe $10,000 in a year? I don't know. It's all counting-before-the-eggs-hatch at this point, and the market is pretty limited. I mean...how many kits can I really sell before I've sold one to everyone who wants one? I have hopes, but honestly I'll be surprised if I sell more than 100.
So anyway, at what point do I need to file paperwork and start a legit business for tax reasons? Is there an income threshold I need to pass first? Should I wait until I'm making enough to justify leasing a workspace and hiring employees? As it stands now, I don't have any employees. I probably have less than $2,000 of assets. I usually "work" less than 10 hours a week. I don't even have a dedicated workspace inside my house. All my machinery is crammed into a glorified closet that's mostly used for storage boxes full of old books and Christmas decorations.
Or can I just consider myself a sole proprietorship and leave it at that? Obviously I'll keep track of everything for tax reasons, but I don't think I have to file anything with the local government if I'm only a sole proprietorship. Should I open a new business bank account just for pneumag stuff? Or am I just worrying about a whole lot of nothing?
Even though I've been doing pneumag jobs for people for years, I have never started a legal business for my paintball work. I consider it a side hustle, like mowing lawns as a kid. Even though I often charge $300-$400 for jobs, probably 80% of that goes into parts. I started keeping track a few years ago, and on average I don't profit that much...usually less than $1,000/year. I do report that on my taxes, but I haven't done anything else besides that.
All that is about to change, though. Maybe. I'm going to release a MAC-33 pneumag kit soon, probably before summer, and this is going to be significantly different than building pneumags and SPARs for people. The kit is mostly off-the-shelf parts. I'm just acting as a middle-man, gathering the parts in bulk to make it all easier/cheaper, and then reselling everything at a profit. Usually I can only find the time to build about 1 pneumag a month, but since the kit is so much less labor intensive, I could see selling 10 or 20 a month, and that could maybe generate a LOT more money. Maybe $10,000 in a year? I don't know. It's all counting-before-the-eggs-hatch at this point, and the market is pretty limited. I mean...how many kits can I really sell before I've sold one to everyone who wants one? I have hopes, but honestly I'll be surprised if I sell more than 100.
So anyway, at what point do I need to file paperwork and start a legit business for tax reasons? Is there an income threshold I need to pass first? Should I wait until I'm making enough to justify leasing a workspace and hiring employees? As it stands now, I don't have any employees. I probably have less than $2,000 of assets. I usually "work" less than 10 hours a week. I don't even have a dedicated workspace inside my house. All my machinery is crammed into a glorified closet that's mostly used for storage boxes full of old books and Christmas decorations.
Or can I just consider myself a sole proprietorship and leave it at that? Obviously I'll keep track of everything for tax reasons, but I don't think I have to file anything with the local government if I'm only a sole proprietorship. Should I open a new business bank account just for pneumag stuff? Or am I just worrying about a whole lot of nothing?
Comment