sorcerertd
Member
First of all, I realize that this is not an accounting forum and I am not looking for any help with filing taxes. I'd just like a general consensus for those that wish to participate. I hope this doesn't break any rules.
For the purpose of my question, I will make this basic legal statement. Any income can be reported as "other" on the primary tax form (hobby) or filed as self-employed income using a schedule C (business). The IRS has no set dollar amount at which it is no longer considered a hobby as long as your income is used primarily to support your hobby.
Let's face it, most of us are not going to pay the bills making pens. It's a hobby and a fairly expensive one. I do, however, conduct business under a registered business name. Selling on Etsy (or whatever platform) there is a clear and traceable record of any income. Technically, I did make more money than I spent last year; enough to have to pay into social security and medicare (the threshold is only $400). Truthfully, the only reason that hasn't all been spent is because it isn't enough for a nicer lathe yet. I am going to file this as business income this year and eat the 15.3% loss to the IRS. Going forward, I may change that strategy. Without advice or particulars, what you you do?
For the purpose of my question, I will make this basic legal statement. Any income can be reported as "other" on the primary tax form (hobby) or filed as self-employed income using a schedule C (business). The IRS has no set dollar amount at which it is no longer considered a hobby as long as your income is used primarily to support your hobby.
Let's face it, most of us are not going to pay the bills making pens. It's a hobby and a fairly expensive one. I do, however, conduct business under a registered business name. Selling on Etsy (or whatever platform) there is a clear and traceable record of any income. Technically, I did make more money than I spent last year; enough to have to pay into social security and medicare (the threshold is only $400). Truthfully, the only reason that hasn't all been spent is because it isn't enough for a nicer lathe yet. I am going to file this as business income this year and eat the 15.3% loss to the IRS. Going forward, I may change that strategy. Without advice or particulars, what you you do?