…And how can you turn it into one?
Do you have a hobby that you like to do in your spare time? Most people do. Personally, I like to crochet, write stories, and tutor. I have friends that draw, paint, play music, make jewelry, bake, design clothes– the list goes on and on. If you have some sort of marketable skill like that, why not make yourself a profit? By selling your own products or skills, you can turn your hobby into a business. And business means profits – and tax breaks – for you! Check out this post by Kay Bell at the Bankrate blog for tips:
You can turn a hobby into a business if:
You carry on the activity in a businesslike manner. This includes, for example, keeping good books and records, promoting your business and holding down costs where possible. The IRS will look at:
- How much time and effort you devote to the enterprise.
- Whether you depend on income from the activity for your livelihood.
Whether the activity makes a profit in some years and, if so, how much.
If your hobby is sanctioned as a business from the IRS, you can get much, much more in tax breaks from it!