When is it a hobby vs business??

quickphotography78 · Jan 20, 2011

Does anyone know at what point the government considers a hobby turning into a business?

I have been taking snapshots since I was a kid but finally got a better camera which I love. I have just started taking photos for friends and family which they are pleased. I am looking to make some extra cash but I know I am not ready for a business for awhile or maybe ever.

robb01 · Jan 20, 2011

When you make over $600 you are required to report it

ls6firebird · Jan 20, 2011

robb01 said:
When you make over $600 you are required to report it

a year? really?

vtf · Jan 20, 2011

Which branch? Federal, State, County, City?
Varies between all of them

robb01 · Jan 20, 2011

Actually that was bad info, and I just looked it up to make sure. Apparently the IRS wants you to report ALL income to them, here is a link with more info:

Reporting Miscellaneous Income

ls6firebird · Jan 20, 2011

whoops :banghead:

vtf · Jan 20, 2011

The requirements and expectations vary by your location but I'll guarantee you someone will think its a business the moment you start making any amount of money. Whether its sales tax, use tax, income tax, property tax, local building codes and regulations. Your neighbors or competing photographers. My recommendation is speak to an accountant who will know your situation.

robdavis305 · Jan 20, 2011

Dont report anything. Its your money and you earned it. What they dont know wont kill them.

robb01 · Jan 20, 2011

robdavis305 said:
Dont report anything. Its your money and you earned it. What they dont know wont kill them.

tax fraud never hurt no one :lmao:

djacobox372 · Jan 20, 2011

I'm no tax expert, maybe someone else can answer this.

If u spend 2000 on camera gear, but had an income of $1500 from using it, is that actually income? Since you're still in the hole $500

sierramister · Jan 20, 2011

djacobox372 said:
I'm no tax expert, maybe someone else can answer this.

If u spend 2000 on camera gear, but had an income of $1500 from using it, is that actually income? Since you're still in the hole $500

No, you usually cannot write off business expenses for camera gear until you've really started making money from it. As a hobbyist, I've heard it is around 3 years of profit before you can write anything off.

No writing off business expenses, but they sure do expect you to write ON any business profits for taxing!

Do NOT write off your camera until you've talked to an accountant, I am no expert!

quickphotography78 · Jan 20, 2011

Well I am planning on registering a business name in my state and I am trying to figure out what to do from there. I feel clueless at this point about what the government expects or wants. To bad nothing is ever easy

or maybe I am just thinking about it too much

Josh66 · Jan 20, 2011

djacobox372 said:
I'm no tax expert, maybe someone else can answer this.

If u spend 2000 on camera gear, but had an income of $1500 from using it, is that actually income? Since you're still in the hole $500

That would only work if you itemized. For only 2k spent on gear, itemizing wouldn't be worth it.

The standard deduction for a single person (the lowest one, married is higher) is $5700 for 2010. You would have to spend more than that on your 'business' to make itemizing worthwhile.

And you would have to be able to prove all of those expenses too...
(Hope you saved all of your receipts...)

usayit · Jan 20, 2011

You are also suppose to report any online purchases that were not subject to sales tax at the time of purchase....

:-/

quickphotography78 · Jan 20, 2011

I only have my camera right now and some stuff I bought to take newborn photos but I have kept my receipts on those. I have everything filed I try and stay organized, that is what having children has taught me. If I don't stay organized everything goes downhill from there.