The IRS and your hobby
03-29-2012, 10:30 PM
#11
Banned
Join Date: Dec 2009
Location: Enid, OK
Posts: 8,273
starting this year NEW laws went into effect. That is why you have to file your social to have a paypal or any other online billing service now!
03-30-2012, 03:22 AM
#14
Power Poster
Join Date: Feb 2009
Location: Northern Michigan
Posts: 12,861
true--- as long as you keep good records (reciepts) when you do your taxes you can show your expenses- and your income and be able to not owe---if you have no receipts proving what your expenses are you will owe taxes on the income you earned...if selling your craft you need to keep good records to avoid financial problems (tax problems) down the road.
03-30-2012, 04:03 AM
#15
Junior Member
Join Date: Apr 2011
Location: Mineral Wells,WV
Posts: 106
I have been doing taxes for many years now. If one starts a biz and can not show a profit in less than 5 years it becomes a hobby! The IRS does not care if that Biz is construction or quilting they just will not let u keep showing a lose on your tax return. With that said buy the time u take all the deductions for your materials & the depreciation on a $15,000.00 plus dollars for a long arm. Unless u are putting out 2 quilts a day I would have no idea on how you could make any money!
03-30-2012, 04:48 AM
#16
Super Member
Join Date: Jul 2010
Location: Wi
Posts: 9,232
03-30-2012, 04:58 AM
#18
Junior Member
Join Date: Nov 2011
Location: West Central Illinois
Posts: 100
Your friend must have been selling LOTS to owe LOTS of money. Did she not keep receipts to show her expenses?
Plus the IRS will collect Social Security on self-employed people. It's twice the rate that collected from those who work for an employer.
Plus the IRS will collect Social Security on self-employed people. It's twice the rate that collected from those who work for an employer.
03-30-2012, 05:08 AM
#19
Super Member
Join Date: Jul 2010
Location: Wi
Posts: 9,232
http://blog.auctionbytes.com/cgi-bin...7077.html/2/20 another link.you must sell over$20,000 and over 200 transactions.and not or-very important.
Last edited by wolph33; 03-30-2012 at 05:11 AM.
03-30-2012, 05:57 AM
#20
Super Member
Join Date: Jun 2010
Location: Bay Area near San Francisco
Posts: 1,213
Actually, it is a good write-off. If you make quilts for Project Linus or for your guild to donate to homeless, NICU units, etc., you can take the cost of your fabric and other supplies used in the quilt as a donation. If you sell any quilts/blocks, etc., you can list that income and deduct your costs. It may not be much, but it's worth it sometimes if you do enough donation/charity quilt type things.
I design patterns, sell them, sell some quilts, and donate the quilts I make as mockups for patterns to my guild. I also edit patterns for other designers. I sometimes make only a few hundred a year, but I can deduct some of my fabric cost and it evens out. Better still, because I keep track of everything and report it, I don't have the IRS on my back.
I design patterns, sell them, sell some quilts, and donate the quilts I make as mockups for patterns to my guild. I also edit patterns for other designers. I sometimes make only a few hundred a year, but I can deduct some of my fabric cost and it evens out. Better still, because I keep track of everything and report it, I don't have the IRS on my back.
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