A subject that comes up quite often at Anderson, when helping set up entities for clients, is clarifying the difference between a hobby vs business. What exactly differentiates the two? While it may seem like a trivial matter, the IRS has very clear rules about what constitutes a hobby vs a business.
These rules become especially important to you, as both a taxpayer and business owner, when it comes to matters such as taking deductions on your tax return and how to handle losses. To help clarify the matter, Anderson tax attorney Eric Day dives into the hobby vs business question in the following video below:
Topics Discussed Include:
- What Really Is a ‘Business’ vs a ‘Hobby’?
- How Can You Prove to the IRS that You Have a ‘Business’?
- What Factors Determine If a Deduction is Valid or Not
- How the IRS Decides If You Are Operating For Profit
- How to Preserve Losses for Future Use
Click to watch the video below:
If you have any further questions regarding this subject, or believe you can monetize your own personal hobby into a viable business and are looking for assistance in doing so, then be sure to contact us today by filling out one of our free 30-minute strategy session forms today. Again, this is a topic we deal with quite often so helping make sure you indeed have a viable business that can be proven to the IRS is a task we are up to handling.
Also be sure to subscribe to our YouTube channel for upcoming videos offering legal, tax and business strategies and tips for business owners, real estate investors, and stock traders.
**If you would like to invite one of our expert Attorneys to be a part of your show, please contact Desiree Wolfe at [email protected].