Hare-brained idea?

[Scottowl]

I was looking at Youtube a while ago, and some guy was on there about starting a LLC with the purpose of claiming tax credits for normal spending.
I think his product was mowing your own lawn, and he went on about writing off your time, money spent on fuel and equipment upkeep, as well as clothing, and even part of housing costs because of a home office.

I would not imagine this would work, particularly while in Ch 13, but it did get me wondering about a hobby of mine (photography), and the possibility of doing some paid work with a side benefit of gaining some deductions.

Do people start up businesses in the middle of a Ch 13 case?

[justbroke]

I would be wary of any scheme to avoid taxes, especially from an a YouTube channel on the Internet. LLCs require annual reports that can cost upwards of $200 - $400 a year. You also need to file a different form for an LLC and may need to choose between being treated as a partnership, an S Corp, or a C Corp for tax purposes. It does complicate things and I suggest people talk to a CPA on how to organize the business, before jumping into the deep end.

Owning a business during a Chapter 13 complicates things. The Chapter 13 Standing Trustee "may" want periodic reports of your income. The IRS has some clear guidelines, or maybe not so clear, on when something is no longer just a hobby. Keeping the books straight and making sure you are not operating as an alter-ego means being serious about being in business.

Bottom line, yes some people start businesses in the middle of a Chapter 13; usually out of necessity to earn income.

[shipo]

I agree with justbroke, doing anything which will invite scrutiny is not a wise plan while in a Chapter 13. That said, if you have a "side hustle", be it photography, bread baking, shoeing horses, or smoking ribs, it is, IMHO, best if you do it on a cash only basis.

[imtryingtho]

Real, I’m like how many kids can I nanny for cash 😬😂 jk

[imtryingtho]

Oops posted twice