pyffer3

My husband was doing our taxes the other night and jokingly said I should start a quilting and crafts home business so we could start to deduct the costs of my addiction! I have actually sold a baby quilt and some table runners, but I don't know if there is a specific amount you would have to sell to be considered a business. Any ideas from those of you who have quilting/sewing as a home business?

Jingle

No home business here. Before you consider starting one I would thoroughly check into it. We have a small business and it is very hard to make a decent buck, only getting worse with health care and taxes. We pay a CPA to do all legal things for us and he is scared to death the IRS will come after him, so he doesn't want to be liable for anything. There are so many new laws they say it is hard to keep up with them.

toverly

I've been thru Shubuta many times on my way between Pensacola and Tupelo. I don't have the answer on a business, just wanted to say Hi!

Lori S

First the IRS , has the expectation that a business should be profitable ( therefore taxable) . If you create a business and year after year you show a loss ( as in deductions on your taxes for the loss) it will move you into very high risk for an audit. The IRS is more than keen on people who have hobbies that want to show it as a business for a tax benefit. If as a result of the audit you designated as a Hobby an not a real viable business you will be fined...steeply!

ann31039

you can make up to 2000 per year as hobby income and report it on your regular 1040. you may also deduct your materials and supplies up to the amount you make from your hobby. if you make over 2000 per year, it is considered a business and a schedule C will be filed. The IRS will consider 3 of 5 years on a schedule C showing a loss as a hobby and not a business. It is not difficult to do either way. Just document, document, document. Keep records, reciepts, etc. The IRS does audit. That is not really a big deal IF you have the records to prove your tax returns. IRS will back off if you keep really good records.

dunster

Please don't rely on this board for tax advice. Go to a professional tax advisor, or carefully read the IRS bulletins.

justflyingin

No kidding!

ckcowl

any income over $400 is supposed to be reported- each state has their own 'rules' about acquiring a DBA (doing business as) assumed name. you need to talk to a CPA- tax adviser to see what the benefits are to actually turn your hobby into a business. you can claim/use any $$ made on your taxes without being a business....if you decide to become a business setting it up properly- and keeping very good records is a must to avoid problems later- start with an adviser- (in your area)

patricej

absolutely the best advice you can get here.