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.