Author Topic: Hobby-business will actually be profitable!  (Read 2935 times)

ABK

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Hobby-business will actually be profitable!
« on: November 03, 2016, 10:54:58 AM »
This year I turned my new craft hobby into a sole proprietorship so that I could deduct the costs of supplies etc. for tax purposes. This in itself would have been enough of a benefit to keep me happy, but it turns out that the products of this hobby are actually appealing enough to sell, and by the end of this year I'll have sold enough to make back what I spent on supplies, and then some!

We won't be able to take that deduction after all, but this is very promising for growing the business in the coming years.

Frugal Lizard

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Re: Hobby-business will actually be profitable!
« Reply #1 on: November 03, 2016, 11:48:29 AM »
Congratulations - nice to do better than breaking even on a hobby.

HipGnosis

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Re: Hobby-business will actually be profitable!
« Reply #2 on: November 05, 2016, 08:13:15 PM »
So share the craft, hobby, business!!

soccerluvof4

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Re: Hobby-business will actually be profitable!
« Reply #3 on: November 13, 2016, 03:17:07 PM »
Congrats! nice surprise for you but what is the hobby?

TomTX

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Re: Hobby-business will actually be profitable!
« Reply #4 on: November 15, 2016, 12:11:35 PM »
Home office deduction?

ABK

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Re: Hobby-business will actually be profitable!
« Reply #5 on: November 17, 2016, 09:35:09 AM »
I make stained glass mosaic items. Jewelry, wall hangings, sun-catchers, ornaments, etc. which I then sell at craft fairs and to my friends. I'm planning to put together an Etsy shop in 2017.

I live in an apartment so I could only take the home office deduction on a tiny 2X3 linen closet that is stuffed with supplies. That only comes to about $40/year so I'm not sure it's worth it. I've heard that home offices can trigger an audit--anyone have experience with that?

HipGnosis

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Re: Hobby-business will actually be profitable!
« Reply #6 on: November 17, 2016, 01:12:18 PM »
You can (should?) be able to deduct your supplies.

I've heard/read that audits are less frequent than they use to be - even the IRS has had to cut back.
I really doubt they'd ever audit a $40 deduction, esp when you're paying taxes on the (small) profit.