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Time to get your business taxes ready.
For artists and makers, running your business in a manner compliant with I.R.S. rules can make a BIG DIFFERENCE between being declared a "business" instead of a "hobby". This has potentially major financial consequences.
The IRS defines a "hobby" as "an activity not engaged in for profit" and consequently deductions for expenses are limited. On the other hand, a "business" is allowed to deduct the operating expenses from the business revenue to determine net taxable income. Read more about this issue: "Business or Hobby? Answer Has Implications for Deductions."
The I.R.S. web site offers videos to help small businesses in convenient, digestible segments. I recommend watching this videos.
I have posted links to the IRS videos and previous posts for preparing your taxes on ASK Harri...
Get ready to do your taxes with this information.
Harriete Estel Berman