Federal Tax, Tax

Hobby or Business: Which Should You File Under?

Is your hobby actually a business? It’s an important question because although you must report hobby income on your tax return, hobby expenses aren’t currently deductible. In general, an activity is considered a business if you pursue it with continuity and regularity and your primary purpose is to generate income or profit. Some other factors to consider are whether you depend on income from the activity and whether you pursue it in a businesslike manner (for example, you might have a business bank account or business plan). Hobbies, on the other hand, are activities you engage in for pleasure with no expectation of profit. For more information: https://bit.ly/3PZ3XlW . Contact us with questions about your return. © 2022