New and Improved Energy Tax Credits for Homeowners
New and Improved Energy Tax Credits for Homeowners
What's the best way to report your vacation home rental income?
Do you have a beach or mountain home that you rent out? What’s the best way to report your income?
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.
How does the American Rescue Plan Act of 2021 affect me?
The 2021 tax filing season has been quite a roller coaster ride so far. As if 2020 didn’t have enough built-in complications, the American Rescue Plan Act (ARPA) of 2021 adds even more twists for your tax return. The United States had provided about $6 trillion in total economic relief to the American people during the coronavirus pandemic, including the $1.9 trillion approved when President Biden signed the American Rescue Plan Act (ARPA) into law. Much of the American Rescue Plan’s economic relief is administered through the tax code in direct payments (stimulus checks) and expanded Child Tax Credit (CTC) in 2021.