Hobby Archives - John R. Dundon II, Enrolled Agent
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Hobby

03 Jun

Posted at 00:00h in Business Expense, Deductible Expense, Disallowed Expenses, Hobby, IRS Examination, Rental Real Estate, Tax Abuse, Tax Court, Tax Guidance & Preparation

You are alloweddeductions for ordinary and necessary expenses incurred in the courseof business under §162, but you must also keep adequate records to substantiate expenses which can at times seem esoteric if not convoluted.Deductibletravel expenses for example under §274(d) arebased on whether or not the...

08 Feb

Posted at 00:00h in Accounting Method, Business Expense, Business Income, Car expense, Depreciation, Disallowed Expenses, Employee Business Expense, Entity Classification, FICA, Health Insurance, Hobby, Home Office, Husband/Wife, IRS Form 1040 Schedule C, Medicare, Net Operating Loss, NOL, Passive Activity, Self Employ, Small Business, Social Security, Social Security Tax, Sole Proprietor, Start up costs, Sub-chapter S, Tax Guidance & Preparation, Tax Problems & Requests

IRS Form 1040 Schedule C: Profit or Loss from Business can be a tough form to work through. Tread lightly and seek guidance. The sole proprietorship or single member Limited Liability Corporation (LLC) is in my opinion the easiest type of business entity to set up...

04 Mar

Posted at 00:00h in Business Expense, Hobby

Only by considering all the facts and circumstances of each situation canyou determine whether an expense wasincurred in a "trade or business,"and whether it was an "ordinary and necessary" expense for that business, making it a deductible expense. Before you can determine whetherexpenses may be deducted,...

27 Oct

Posted at 00:00h in Business Expense, Hobby

Sec. 183 denies loss deductions beyond income earned from activities in which the taxpayer does not intend to make a profit. These deductions are typically referred to as "hobby losses." Generally, an activity is presumed to be carried on for-profit if it makes a profit...

05 Jan

Posted at 00:00h in Hobby, Income

Since a hobby is something done for personal pleasure it is not a trade or business, should income be generated from a hobby the gross income is reported on Line 21, Form 1040. The cost of the materials used to make the item sold directly...

06 Aug

Posted at 00:00h in Business Expense, Hobby

Rowing, X-C skiing, Biking, Running, Mountain Climbing, Guitar Playing, Fishing, Gardening, Golf, Sewing, Woodworking, Horsemanship, Scrap Booking, Stamp and Coin Collecting, etc. The IRS isn't trying to spoil your fun but if your favorite activity makes a profit every year or so, there may be tax...

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