Quote:
Originally Posted by Moonshot Moose
One thing to keep in mind: Under the Tax Cuts and Jobs Act, for tax years 2018 through 2025, hobby expenses are not deductible at all.
Beginning in 2018 and lasting through 2025, miscellaneous itemized deductions are no longer deductible and therefore no hobby expense is able to reduce hobby income. If the IRS classifies your business as a hobby, you'll have to prove that you had a valid profit motive if you want to claim those deductions.
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If your selling activities are classified as a hobby, it's crucial to understand these rules to correctly file your taxes and avoid issues with the IRS. If your hobby starts to make more money or if you're making concerted efforts to be profitable, it may be time to consider if your hobby could qualify as a business for tax purposes. Consulting with a tax professional can provide clarity and help you make the best decisions based on your specific circumstances.