FIL heated his 800 sqft cabin with wood in a little woodstove right in the middle. He got to be near 80 and decided he was tired of hauling in wood (and unplugging the crappy chimney 4 or 5 times a season). So adding the central heat/air AND upgrading the electric service is going to run about, $6,000.
Save $$$ - Heat with Wood
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I've been burning wood for 40 years now and since my tractor is now ten years old, I was thinking of the $$$$$ I've dumped into burning wood just over the last ten years.
Start with, I need 7 cord/year, so I spend 20k for tractor with FEL and PTO winch, $1000.00 for 2 chainsaws, $600.00 for tire chains, the woodsplitter bought in 92 for $1,200.00. With just these 4 needed things, with todays prices probably would run around 25k.
So is it worth it, I dont know, I know I still like going down the woods with my tractor on a 25ｰ sunshiny January day when the ground is all covered with snow, but I know I wouldn't like it if doing the same thing with horses, bucksaw and a axe.
Then the cost of maintenance, tires, and oil changes....... but then again for me it's hard to figure what the actual cost is for 7 cord/year, because the tractor is used a lot for other thing like snow removal, landscaping, and the massive work that was done hauling out logs for lumber in the past 5 years, a house and one good size garage.
Start with, I need 7 cord/year, so I spend 20k for tractor with FEL and PTO winch, $1000.00 for 2 chainsaws, $600.00 for tire chains, the woodsplitter bought in 92 for $1,200.00. With just these 4 needed things, with todays prices probably would run around 25k.
So is it worth it, I dont know, I know I still like going down the woods with my tractor on a 25ｰ sunshiny January day when the ground is all covered with snow, but I know I wouldn't like it if doing the same thing with horses, bucksaw and a axe.
Then the cost of maintenance, tires, and oil changes....... but then again for me it's hard to figure what the actual cost is for 7 cord/year, because the tractor is used a lot for other thing like snow removal, landscaping, and the massive work that was done hauling out logs for lumber in the past 5 years, a house and one good size garage.
4570Man
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If the entire idea was to split enough wood to heat my house with and I was starting with nothing I'd have a saw, splitter, and a trailer assuming I didn't already have a pickup. That's $2000 or less. Add another $500 for safety gear and other tools that'll make your life easier. Anyone figuring up considerably higher cost either enjoys wasting money or is using their equipment for other tasks. And if I decide I don't like splitting wood anymore the imaginary saw, splitter, and trailer can be sold to recoup some of it. And for those of you that think hours on your tractor are costing big bucks. I used my L3240 for 700 hours and sold it for approximately the same price I paid for it. That brought my operating cost to less than $5 an hour.
TnAndy
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Another issued often missed when you produce and use anything from your own land, be that firewood, food, etc, are the taxes you AVOID in doing so.
To earn the money required to purchase fuel, or food, or whatever, also requires you pay an often hefty tax on the income earned to have after tax dollars left to buy the whatever......plus you often get hit with a sales tax on the purchase even using after tax dollars !
I use this analogy with my sawmill lumber often:
Say I buy a 2x4 stud in town (crappy things that they are), and it costs $2.50. The real cost of it is (in my case) is close to $3.90. My effective, self employed federal income tax/SS rate is about 35%. That means I have to earn $3.90 to have $2.50 left over to buy that stud......plus 9.75% in sales tax. (no income tax in TN). So each 2x4 I produce and use off my mill is actually worth over 4 dollars.
When you start factoring in the taxes you don't pay on home produced stuff, it can be a significant factor.
To earn the money required to purchase fuel, or food, or whatever, also requires you pay an often hefty tax on the income earned to have after tax dollars left to buy the whatever......plus you often get hit with a sales tax on the purchase even using after tax dollars !
I use this analogy with my sawmill lumber often:
Say I buy a 2x4 stud in town (crappy things that they are), and it costs $2.50. The real cost of it is (in my case) is close to $3.90. My effective, self employed federal income tax/SS rate is about 35%. That means I have to earn $3.90 to have $2.50 left over to buy that stud......plus 9.75% in sales tax. (no income tax in TN). So each 2x4 I produce and use off my mill is actually worth over 4 dollars.
When you start factoring in the taxes you don't pay on home produced stuff, it can be a significant factor.
LD1
Epic Contributor
Taxes have no effect on 99% of people who cut, burn, or sell firewood.
Dont know anyone that pays taxes, or charges people taxes for selling.
As far as uncle sam come year end on that income.....I know most dont even mess with it. Say someone sells 10 cord a year for $1500. With so many things to write off, truck mileage, fuel, equipment, half a cell phone bill, etc etc......it would quickly show on paper as a loss or little to no profit. So since not really a net change either way on taxes....most just keep it simple and off-book.
So no point in complicating things with taxes or other fancy calculations to justify stuff.
Its as simple as this......my house needs a cord a month to keep warm. My house needs $160 paid to (pick your utility/fuel source) to keep warm.
So there is two options....Cut that cord and burn it. Or cut that cord, trade it for cash, and buy the heat of your choosing. Taxes dont come into play.
Dont know anyone that pays taxes, or charges people taxes for selling.
As far as uncle sam come year end on that income.....I know most dont even mess with it. Say someone sells 10 cord a year for $1500. With so many things to write off, truck mileage, fuel, equipment, half a cell phone bill, etc etc......it would quickly show on paper as a loss or little to no profit. So since not really a net change either way on taxes....most just keep it simple and off-book.
So no point in complicating things with taxes or other fancy calculations to justify stuff.
Its as simple as this......my house needs a cord a month to keep warm. My house needs $160 paid to (pick your utility/fuel source) to keep warm.
So there is two options....Cut that cord and burn it. Or cut that cord, trade it for cash, and buy the heat of your choosing. Taxes dont come into play.
TnAndy
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LD1
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Nope.
You implied that someone paying for wood, is actually paying more than face value for it (since they are buying with money that was taxed already).
And implied that cutting your own wood, would save more than the value of said wood because one would have to pay taxes on the income if they were to sell it.
IE: you implied that buying wood for $160 would actually cost someone closer to $200 because that $160 was taxed. And if one were to sell wood for $160 they would only net $120 after they pay taxes.
I just said this simply isnt true. Because most dont claim firewood income on taxes, so selling for $160, is $160 in your pocket, NOT $120 as you think.
And the $160 that they buy wood for, that is taxed money.........well its the same as paying for electric, propane, natural gas, etc. You are paying for it with taxed money.
So your claim is total bogus.
Quebecguy
Gold Member
LD1
Epic Contributor
Enlighten us all.
Taxes have no bearing.
You can choose to burn wood that has $160 cash value
Or you can choose to buy $160 worth of heat in the form of electric, propane, nat gas, etc.
Just how do taxes come into play?
In my case, I can choose to burn $160 worth of wood and in doing so, that pumps 12 Million BTU's of heat into my house
Or I can sell that same wood for $160 cash, hand that to my electric company, and in turn they sell me 1333 Kwh of electric. And that 1333 Kwh of power will run my geothermal long enough to put about 16-18 Million BTU's of heat in my house.
So where do taxes factor into that equation? You are trying to over-complicate things in hopes that the facts will get lost in the BS.
Some people like the heat....great. Some people are already established with a wood burning setup and cannot justify the large up-front cost to convert.....great. Some people just like being self sufficient and not depend on power or some other utility.....great. All good reasons to burn wood. But trying to justify it as a cost savings because of taxes.....100% pure BS
DMax82
Silver Member
Let's say I cut a cord of firewood with a value of $160. Option 1 - burn it myself. If I do this I am getting the full $160 benefit. Option 2 - sell it for $160 and buy the heat of my choice (propane, electric, coal, whatever...). In this case I pay taxes on the $160, then buy fuel with whatever is left. So if the tax man takes $25 then I can only buy $135 worth of propane.
My reasons for burning wood aren't economic though. About to buy a fancy wood insert for the farmhouse I'm remodeling. Gas logs wood be a lot cheaper but the wife and I both love burning wood. I also like cutting it and have a lot of trees to clean up on the property.
LD1
Epic Contributor
Don't understand why you would only get $135 worth of propane?
Why are you even figuring it like that.
Figure how heat you can buy with $160. Period. Nothing more. And see how that compares to wood.
The dollar amount is irrelevant.
The point is....you can get X amount of heat out of a given amount of wood.
You could also sell that X amount of wood for Y dollars.
How much heat can you buy with Y dollars and how does it compare?
With my geothermal, and current wood price of $160, I be an get more heat, dollar for dollar, than with wood
LD1
Epic Contributor
No one has to pay income tax on selling wood if you are smart.
When you burn wood for your consumption, there are no write-offs.
When you sell it, bars, chains, saw gas, saws, splitter, truck expenses, etc etc etc all become write-offs. It balances out the income and the need change is zero.
Oldpath05.....take all the notes you want. I do indeed claim the income. If I did not, I'd be paying MORE to the IRS. I write off Kubota expenses, new dump trailer, saw stuff, etc. All rolled into my mowing business.
Never known it's to come after someone for selling 10 cord of firewood a year, and never know anyone to claim the income. That's all I'm saying. So forget the taxes. Not relevant to the discussion at hand for 90% of us.
When you burn wood for your consumption, there are no write-offs.
When you sell it, bars, chains, saw gas, saws, splitter, truck expenses, etc etc etc all become write-offs. It balances out the income and the need change is zero.
Oldpath05.....take all the notes you want. I do indeed claim the income. If I did not, I'd be paying MORE to the IRS. I write off Kubota expenses, new dump trailer, saw stuff, etc. All rolled into my mowing business.
Never known it's to come after someone for selling 10 cord of firewood a year, and never know anyone to claim the income. That's all I'm saying. So forget the taxes. Not relevant to the discussion at hand for 90% of us.
TnAndy
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I said nothing about selling wood, nor whether anyone pays taxes on the sale.
What I said was when BUYING anything you can produce yourself, you have to factor in the cost of taxes on the equation. As I said, I have to factor in about 35% federal taxes + sales tax if I buy fuels. That makes my home produced, and used, fuel, or food, or whatever, significantly less expensive.
You can believe it or not.....
What I said was when BUYING anything you can produce yourself, you have to factor in the cost of taxes on the equation. As I said, I have to factor in about 35% federal taxes + sales tax if I buy fuels. That makes my home produced, and used, fuel, or food, or whatever, significantly less expensive.
You can believe it or not.....
Deere Dude
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I'm a believer. Anything you buy, be it lumber, cigarettes dinner out, or wood comes in after you pay taxes on your income. That is why there are so many DIYers.
LD1
Epic Contributor
Then what's your beef with me?
I can sell wood for $160 cold hard cash.
I know how much heat I can buy for that $160 cold hard cash, and it Trump's the heat I can get from wood.
Taxes have absolutely nothing to do with anything I have said.
DMax82
Silver Member
That $160 is INCOME, and the government takes a percentage of it from people who give an honest accounting. So you would not have the full $160 to spend on other fuels after Uncle Sam takes his cut. Whether you actually declare and pay taxes on that income is up to you and your own set of personal ethics. Odds are the government won't ever know, but again, up to you.
LD1 as another homeowner with geo you've gone an ruined it for me. I'm now looking at about 5 cords of wood and feeling guilty about using it instead of selling it.
Not really but I never really looked at the wood pile from your prospective, just as free heat. I still plan on burning it though. I've got a 16" stainless flue that runs 32ft high and about 26ft of stonework for the fireplace. It was obviously never put in to "save" us money but simply for our enjoyment. The whole family begs for me to get the fire going during the winter if I haven't already.
