Many Americans seek to earn money by way of a side hustle, which sometimes starts as a hobby. The IRS is reminding taxpayers that this income is taxable. Depending on whether the IRS considers the activity to be a business or a hobby, the tax treatment is very different. On their tax returns, businesses can generally deduct ordinary and necessary business expenses. But if the IRS deems an activity a hobby, deductions are much more limited. To determine if an activity is considered a business, the IRS looks at key factors. These include whether the taxpayer displays a profit motive, operates in a businesslike manner and keeps good records. To learn more from the IRS: https://bit.ly/3VJi4BG. Contact us with questions. © 2025