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Whether it’s something you’ve been doing for years or something that you have just started recently to make extra month, the IRS reminds taxpayers that all income earned from hobbies in 2020 must be reported on next year’s tax return.
It is important to understand the difference between a hobby and a business. A business operates to make a profit. Individuals engage in hobby for sport or recreation, not to make a profit.
Here are nine things taxpayers must consider when determining if an activity is a hobby or a business:
If you are unsure if your income should be reported as a hobby or a business, we are here to help. Contact us today for a consultation appointment!
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