Does the IRS Consider Your Quilting a Hobby or Business?
If you’ve begun to earn some income from your quilting or related activities, when does this transition from a hobby to true business?
Jean Murray, at Small Business Boomers, has a great post with information about what the IRS (Internal Revenue Service in the US) considers a true business. You might like to check out her, Boomers Retiring to “Fun” Businesses: Is birdwatching a business?
She mentions some of the criteria the IRS uses to determine whether you’re en titled to deduct your losses from the business you’re operating or starting up. Jean does mention that writing is one business that’s easier to justify some of your expenses under the “hobby loss” rules than others. So if you’re a writer, as well as a quilter/fabric artist, some rules may apply to you that won’t to others…and vice versa.
Jean will lead you to information that could prove helpful.
(Amazon image)
(c)2008 Mary Emma Allen
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1 opinion for Does the IRS Consider Your Quilting a Hobby or Business?
Jean Murray
Jul 8, 2008 at 6:52 am
Thanks, Mary Emma! I appreciate the link. Quilters are among those who might have trouble justifying their business, since quilting is definitely considered a hobby. If you have a quilting business, be sure to keep separate records, (get a business checking account), keep good records on expenditures, and do some advertising/marketing, so you can show that you were serious about trying to make the business profitable.
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