Hobby or business
Nov 27, 2013 16:07:48 #
An amateur photographer sells a couple photos to friends and likes the money. Then buys an Easy-Up tent and does a couple art festivals and makes a few more bucks. Then prints more photos and continues to make more bucks. He has a full time job and does this for "fun"....
At what point does this money coming in become reportable to the IRS as income ?? Is there a dollar amount like the $600 threshold on 1099's ??
Are there any tax professionals here on the UHH that can weigh in on this ?? Anybody caught up in a bad experience with the IRS over hobby vs business ???
At what point does this money coming in become reportable to the IRS as income ?? Is there a dollar amount like the $600 threshold on 1099's ??
Are there any tax professionals here on the UHH that can weigh in on this ?? Anybody caught up in a bad experience with the IRS over hobby vs business ???
Nov 27, 2013 16:21:16 #
Nov 27, 2013 16:38:04 #
Hankwt wrote:
Is this like " I have a friend with an erection problem" ....
:thumbup: :D
Nov 27, 2013 16:46:23 #
Hankwt wrote:
Is this like " I have a friend with an erection problem" ....
Naaa, I haven't bought the tent yet..... But I know it will be a slippery slope !!!!
They already know my name. I don't need to give them something else to look at................
Nov 27, 2013 16:49:34 #
GC likes NIKON wrote:
An amateur photographer sells a couple photos to f... (show quote)
It all depends how many bigger fish the IRS has to fry
Nov 27, 2013 17:32:14 #
GC, you already have another job that gets you to the $600 threshold, so one dollar will make it reportable. But it's a separate business, so it's two incomes. Welcome to the long form and the schedule C(?).
The good thing is if you claim your equipment, depending on how long you depreciate, you just lost money! Hoo-ray, no fed tax, but there is local property tax to pay on your equipment.
I actually don't know what I'm talking about, but I've heard my accountant say those things, many times. Check back next year, I'll have better info!
Good luck
SS
The good thing is if you claim your equipment, depending on how long you depreciate, you just lost money! Hoo-ray, no fed tax, but there is local property tax to pay on your equipment.
I actually don't know what I'm talking about, but I've heard my accountant say those things, many times. Check back next year, I'll have better info!
Good luck
SS
Nov 27, 2013 17:39:40 #
Shutterbugsailer wrote:
It all depends how many bigger fish the IRS has to fry
The IRS can only fry so many fish. They cast their net, when it's full, they fry what's in it.
Always file with an extension. The net is always full by then.
If your a 1040 early bird, even though the crowd is pretty big, when they shoot their arrows into the air, they ALL land on someone.
Just pay your fair share, and stay out of trouble. ;-)
SS
Nov 27, 2013 17:40:41 #
This amateur should talk to an accountant. I could give you my opinion, but some of the state and local issues are best handled by someone who knows the local laws.
Messing around with things like local sales tax can get one in heap of trouble if ignored.
Selling a few pictures to friends is one thing - selling to the public and holding one's self out as a professional is quite another.
Messing around with things like local sales tax can get one in heap of trouble if ignored.
Selling a few pictures to friends is one thing - selling to the public and holding one's self out as a professional is quite another.
Nov 27, 2013 18:56:56 #
^^^BINGO!!!
State and local taxes are the thing to worry about as the "new" pro is more likely to be reported by the OLD pros losing business than he is to be caught by the IRS. ;)
State and local taxes are the thing to worry about as the "new" pro is more likely to be reported by the OLD pros losing business than he is to be caught by the IRS. ;)
Nov 27, 2013 18:57:23 #
Yep expenses are tax deductible including mileage and all kinds of other goodies most don't think about. My wife had a small business run out of our home and first few years always showed a loss for tax reporting purposes. By the way, how much did you have to pay for your business licenses?
Nov 27, 2013 19:11:24 #
CHOLLY wrote:
^^^BINGO!!!
State and local taxes are the thing to worry about as the "new" pro is more likely to be reported by the OLD pros losing business than he is to be caught by the IRS. ;)
State and local taxes are the thing to worry about as the "new" pro is more likely to be reported by the OLD pros losing business than he is to be caught by the IRS. ;)
You are correct. I would not hesitate to turn in someone who is not following the rules. It would be fun to watch.
Nov 27, 2013 19:36:49 #
Nov 27, 2013 22:55:27 #
I am a jewelry designer and go to local fesivals and i know the law here is that i have to pay my sales tax but I do not have to claim it on my taxes until I make over a certain amount at the moment I cant remember how much it is( its been a long day). I only do a few small shows a year and never hit that amount, but if i remember correctly it is quite a bit before I have to claim it as income.
Nov 28, 2013 00:28:47 #
sandheinrichc wrote:
I am a jewelry designer and go to local fesivals and i know the law here is that i have to pay my sales tax but I do not have to claim it on my taxes until I make over a certain amount at the moment I cant remember how much it is( its been a long day). I only do a few small shows a year and never hit that amount, but if i remember correctly it is quite a bit before I have to claim it as income.
Same here. I was worried I'd be breaking some kind of tax law but I discovered I had to be making a profit of over five thousand before I would even be considered a business. Otherwise my state looks at my artistic endeavors as a hobby.
Nov 28, 2013 00:37:06 #
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