Want to turn a hobby into a career? Check out the article below to read more on how you can turn your hobby into a Tax Write-Off and Profit.........
Just about everybody has some kind of hobby they enjoy. Generally that hobby costs money in one way or another. For instance if you enjoy photography, your camera most likely cost money. Golfers have to pay for their equipment and green fees.
“Quit thinking hobby and start thinking business.”
Wouldn't it be great if those expenses were legitimate tax deductions? Well, maybe they can. Per IRS regulations, hobby expenses are not tax deductible. So how can you legally deduct those expenses? Quit thinking hobby and start thinking business.
Three Main Qualifications to Deduct Business Expenses
- The business has a reasonable expectation of profit
- Expenses must be necessary for the business
- Expenses must be ordinary for the business
Several factors need to be considered to determine the profit aspect (contact me). Necessary, means it is needed for the operation of your business. Ordinary, means it is common and accepted in your particular business field.
So why not turn your hobby into profit? At the very least, get a tax write‐off while you pursue the possibility of profit. Just make sure you don't ruin something that brings you enjoyment by making a business out of that particular activity. Hobbies evolve from passions, but a company requires work and responsibility. Before mixing the two, be certain you've planned it out so the fun doesn't get lost!
Disclaimer: I am not suggesting that you start deducting illegitimate expenses. The U.S. does not need tax cheats to further our nation’s deficit. I don’t believe in tax evasion, but tax avoidance is legal and smart. The IRS knows we need more entrepreneurs in our society to encourage free enterprise and price competition, among other things.
Contact me if you have questions…I’m here to help!!