Today, I’m talking about the tax laws related to distinguishing between a hobby and a legitimate business when you’re a creative professional. I’m also explaining the IRS's view of profit motive as the key factor and discussing how you can determine whether you have a business or hobby.

 

Join me in this episode to get some advice and tips on how you can prove profit motive and avoid being wrongly classified as a hobby by the IRS.

 

 

Also mentioned in today’s episode: 

 

• Why profit motive is so important 5:35

• The IRS’s nine-factor test for determining if a creative hobby is a business 19:35

• The hobby loss rule and how it’s applied 33:07

If you enjoyed this episode, please rate, review and share it! 

Links:

• IRS audit technique guide: https://www.irs.gov/pub/irs-pdf/p5558.pdf
•  https://www.irs.gov/newsroom/heres-how-to-tell-the-difference-between-a-hobby-and-a-business-for-tax-purposes
• The Sunlight Podcast Episode 67: Your Business Already Started
• An Audit Nightmare Turned Artist Victory: An Interview with Susan Crile
• Learn more about Money Bootcamp