Is Your Sideline Activity a Business or a Hobby?
Business, irs, small business, hobby, Financial Lisa Price Business, irs, small business, hobby, Financial Lisa Price

Is Your Sideline Activity a Business or a Hobby?

Do you have a sideline activity that you think of as a business?

From this sideline activity, are you claiming tax losses on your Form 1040? Will the IRS consider your sideline a business and allow your loss deductions?

The IRS likes to claim that money-losing sideline activities are hobbies rather than businesses. The federal income tax rules for hobbies have been anti-taxpayer for years, and now an unfavorable change enacted in the Tax Cuts and Jobs Act (TCJA) made things even worse for 2018-2025.

If you have such an activity, we should have your attention.

Here’s the deal: if you can show a profit motive for your now-money-losing sideline activity, you can classify that activity as a business for tax purposes and deduct the losses.

In this article, we give you what you need to know about the federal income tax rules for hobbies and how to tilt the playing field in your favor.

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Emergency Preparedness
emergency preparation, small business, recordkeeping, bookkeeping, accounting, Financial Lisa Price emergency preparation, small business, recordkeeping, bookkeeping, accounting, Financial Lisa Price

Emergency Preparedness

It’s the time of year when Spring is in full swing, children are excited about summer, grads are making plans for the future. It’s also the time of year when the weather can change rapidly, not always for the best. Having grown up in the south, I am accustomed to severe weather changes and I’ve seen the damages and personal loss caused by flooding, hail, and tornados. For small business owners, being prepared can mean staying in business following a disaster.

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