Hobby Loss Rules: Is your favorite pastime a hobby or a business?
From collecting stamps and woodworking to crafting and quilting, people have all kinds of hobbies – and most of these hobbies will never turn a profit. For hobbies that do earn income, people should know that they must report it on their tax returns. They should also be mindful that their hobby might be a business.
Please see the IRS Tax Tip below which provides some items to evaluate to determine if they have pastimes that could be a hobby or a business.
If you have any questions about your favorite pastimes and to determine if you have a hobby or business, please contact your tax advisor.