taxes

Video: Make your hobby pay for itself

 

Reporter talking:  Are you making some money off your hobby? If so, you might want to turn your hobby into a business.

Added income from a hobby is great, for you and the IRS…because that extra money is taxable.

So if your hobby is profitable, consider making it a full-fledged business.

The tax filing tasks aren't too bad. As a sole proprietor, you'll simply file a Schedule C or C-EZ along with your personal Form 1040 each year.

But many expenses you incur to operate your hobby-turned-business can be deducted.

And these write-offs will reduce the amount of tax you owe the IRS on your new endeavor's earnings.

Tag: You can find more business tax breaks by visiting the 2011Tax Guide at Bankrate.com.

« Back to the Tax Deductions page

 

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