Comments on: Hobby vs. Business: Time and Effort to Make a Profit http://www.atkinssc.com/hobby-vs-business-time-and-effort-to-make-a-profit/ Greenville, SC Divorce, Family Law and Probate Lawyer Sun, 12 Jun 2011 09:25:23 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Mona http://www.atkinssc.com/hobby-vs-business-time-and-effort-to-make-a-profit/comment-page-1/#comment-510 Mona Wed, 26 Nov 2008 18:38:34 +0000 http://www.atkinssc.com/277/#comment-510 thanks very much for your advice! as for the disclaimers...i wouldn't expect anything less (: thanks again and have a great holiday! thanks very much for your advice!

as for the disclaimers…i wouldn’t expect anything less (:

thanks again and have a great holiday!

]]> By: Tripp http://www.atkinssc.com/hobby-vs-business-time-and-effort-to-make-a-profit/comment-page-1/#comment-504 Tripp Fri, 21 Nov 2008 18:33:54 +0000 http://www.atkinssc.com/277/#comment-504 Hi Mona, Thanks for your questions. You raise some good points. This area of the law can best be described as gray. In order to be able to deduct an expense as a business expense on your tax return the expense must have been incurred with the intent to make a profit. Basically, whether you are in business or just doing a hobby depends largely on your intent and how you treat the activity. Do you do things formally, keep accurate records, do you have a separate bank account for the business, etc. Also, in answering your question from another post, just because you have another full time income doesn't mean you cannot treat this venture as a business. As long as your venture has the intent to make a profit you should be alright deducting the expenses. Finally, the expenses incurred when you do work for your church which you may not be charging for could be considered a contribution to a tax-exempt organization and treated like any tithe or offering to your church. And, like any good lawyer, I have to add on the following disclaimers: # IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment). # Finally, as a disclaimer, I need to do my ethical duty as an attorney and let you know that this blog is meant to provide general tax and legal information and not specific information for your particular situation. Before relying on any tax advice from this site, you should consult a competent tax professional to discuss the specifics of your case. Hi Mona,
Thanks for your questions. You raise some good points. This area of the law can best be described as gray. In order to be able to deduct an expense as a business expense on your tax return the expense must have been incurred with the intent to make a profit. Basically, whether you are in business or just doing a hobby depends largely on your intent and how you treat the activity. Do you do things formally, keep accurate records, do you have a separate bank account for the business, etc.

Also, in answering your question from another post, just because you have another full time income doesn’t mean you cannot treat this venture as a business. As long as your venture has the intent to make a profit you should be alright deducting the expenses.

Finally, the expenses incurred when you do work for your church which you may not be charging for could be considered a contribution to a tax-exempt organization and treated like any tithe or offering to your church.

And, like any good lawyer, I have to add on the following disclaimers:

# IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment).
# Finally, as a disclaimer, I need to do my ethical duty as an attorney and let you know that this blog is meant to provide general tax and legal information and not specific information for your particular situation. Before relying on any tax advice from this site, you should consult a competent tax professional to discuss the specifics of your case.

]]> By: Mona http://www.atkinssc.com/hobby-vs-business-time-and-effort-to-make-a-profit/comment-page-1/#comment-477 Mona Sat, 15 Nov 2008 08:52:51 +0000 http://www.atkinssc.com/277/#comment-477 So from your example, since you do some work for free (for yourself and for the church) but you also make money doing that for others, is it consider a business or hobby by the IRS? What if you incur expenses for the free work for your church, can you deduct that? If yes, all or part? I am in a very similar situation, I do several things to try to make additional money...software programming, website design, photography. I also do no-charge work for some charity organizations. I incur cost both in the no-charge work and work for money. Which and how much expenses can I deduct? Does the IRS view my activites as hobby or business or both? What is your advice for me on minimizing my taxes. So from your example, since you do some work for free (for yourself and for the church) but you also make money doing that for others, is it consider a business or hobby by the IRS?

What if you incur expenses for the free work for your church, can you deduct that? If yes, all or part?

I am in a very similar situation, I do several things to try to make additional money…software programming, website design, photography. I also do no-charge work for some charity organizations. I incur cost both in the no-charge work and work for money. Which and how much expenses can I deduct? Does the IRS view my activites as hobby or business or both?

What is your advice for me on minimizing my taxes.

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