Showing posts from January, 2022

Tax-Savings Tip: January 2022

  Is Your Sideline Activity a Business or a Hobby?   Do you have a sideline activity that you think of as a business?   From this sideline activity, are you claiming tax losses on your Form 1040? Will the IRS consider your sideline a business and allow your loss deductions?   The IRS likes to claim that money-losing sideline activities are hobbies rather than businesses. The federal income tax rules for hobbies have been anti-taxpayer for years, and now an unfavorable change enacted in the Tax Cuts and Jobs Act (TCJA) made things even worse for 2018-2025.   If you have such an activity, we should have your attention.   Here’s the deal: if you can show a profit motive for your now-money-losing sideline activity, you can classify that activity as a business for tax purposes and deduct the losses.   Factors that can prove (or disprove) such intent include:   ·          Conducting the activity in a business-like manner by keeping good records and searching for