Starting an Ebay Business

[Gusturd]

Originally Posted by BobC

Though the article on the IRS site regarding if it is hobby or a business notes that it was written in May of 2017, it is not necessarily obsolete.

These are excerpted from the IRS article. Are these still accurate? I thought the rules changed this in 2018?

2. Allowable Hobby Deductions. Within certain limits, taxpayers can usually deduct ordinary and necessary hobby expenses. An ordinary expense is one that is common and accepted for the activity. A necessary expense is one that is appropriate for the activity.

3. Limits on Hobby Expenses. Generally, taxpayers can only deduct hobby expenses up to the amount of hobby income. If hobby expenses are more than its income, taxpayers have a loss from the activity. However, a hobby loss can’t be deducted from other income.

4. How to Deduct Hobby Expenses. Taxpayers must itemize deductions on their tax return to deduct hobby expenses. Expenses may fall into three types of deductions, and special rules apply to each type. See Publication 535 for the rules about how to claim them on Schedule A, Itemized Deductions.

[BobC]

Y

Originally Posted by Gusturd

These are excerpted from the IRS article. Are these still accurate? I thought the rules changed this in 2018?

2. Allowable Hobby Deductions. Within certain limits, taxpayers can usually deduct ordinary and necessary hobby expenses. An ordinary expense is one that is common and accepted for the activity. A necessary expense is one that is appropriate for the activity.

3. Limits on Hobby Expenses. Generally, taxpayers can only deduct hobby expenses up to the amount of hobby income. If hobby expenses are more than its income, taxpayers have a loss from the activity. However, a hobby loss can’t be deducted from other income.

4. How to Deduct Hobby Expenses. Taxpayers must itemize deductions on their tax return to deduct hobby expenses. Expenses may fall into three types of deductions, and special rules apply to each type. See Publication 535 for the rules about how to claim them on Schedule A, Itemized Deductions.

The gist of those comments and the articles was I thought more towards the question of if you had a business or a hobby, and that was what I was referring to when I said they weren't really obsolete. Those determining factors haven't changed. You are correct in that the tax law changes in 2018 did away with miscellanous itemized deductions, which is where hobby expenses would have been reported and deducted. So the tax change effectively made those hobby expenses totally non-deductible. Good news is that is only in effect from 2018 through 2025, after which that particular change expires with most of the other 2018 tax law changes.