Today, I’m talking about the tax laws related to distinguishing between a hobby and a legitimate business when you’re a creative professional. I’m also explaining the IRS's view of profit motive as the key factor and discussing how you can determine whether you have a business or hobby.
Join me in this episode to get some advice and tips on how you can prove profit motive and avoid being wrongly classified as a hobby by the IRS.
Also mentioned in today’s episode:
Why profit motive is so important 5:35
The IRS’s nine-factor test for determining if a creative hobby is a business 19:35
The hobby loss rule and how it’s applied 33:07
If you enjoyed this episode, please rate, review and share it!
Links:
3 Secrets to Extra Money in Your Tax Deductions
LLCs & Why You Need to Separate Your Accounts
The Child Care Tax Credit
Taxes Should Be Part of Civic Education: a Story of Hope
10 Minute Tax Fix: Do a Paycheck Checkup
Oops! How to Fix a Tax Mistake
What is a schedule? Capital Gains, Self-Employment Tax and Itemized Deductions
What I do With My Money
How to Have it All
Why I'm Patriotic (Proof of Real Progress)
The One Thing You Must Do in Your Business
Medical Expense Deductions: When it's Worth Tracking & How
The Business Advantages of Creatives
BTS: How I Structure My Day for Better Focus
BTS: Creative Career Advice from Architect John Cole (aka My Dad)
Tips for Your First Hire
S Corp Mistakes That will Cost You Thousands
Tips to Ensure You Pay Yourself
Re-Framing Finances for Creatives
What Counts As Taxable Income?
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