Hobby vs. Business

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Turning a Profit is Not a Bad Thing

By | May 10th, 2018|Categories: Small Business Tax and Accounting|Tags: , |

I always get sideways looks from people when I say this: turning a profit is not a bad thing. Yes, you’ll have to pay tax on that profit, and that stinks. And yes, of course you should deduct everything you possibly can. But when you show losses in a business venture, that means you spent more money than you brought in.

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From the Archives: Taxpayer’s Drag Racing Team is Not a Business

By | July 6th, 2016|Categories: From the Archives|Tags: , |

Image courtesy of Pixabay.com This post from 2011 is quite popular. It's about a person in Minnesota who had a drag racing team which showed substantial losses each year. He took those losses as business deductions on his tax return, but the IRS and Tax Court said "no." The moral is: if you say [...]

Glossary: Hobby Loss Rules

By | September 4th, 2015|Categories: Small Business Tax and Accounting|Tags: , , |

The hobby loss rules are important to know about, especially if you operate a side business.

Taxation of Aspiring Authors: Sometimes It’s Taxing

By | January 11th, 2012|Categories: Small Businesses Taxes|Tags: , |

How are authors taxed? For part-time or aspiring authors, it's sometimes taxing.

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Tax Court: Photography Deductions Not Picture-Perfect

By | December 23rd, 2011|Categories: Small Businesses Taxes|Tags: |

What happens when a taxpayer files a tax return showing $0 of business income, offset by $58,000 of business expenses? They usually get audited. Especially when they have income from other sources of over $100,000. And if the taxpayer pursues the case to Tax Court, the Court usually sides with the IRS. Such was the case [...]

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