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January 2020
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Is it a Hobby or a Business?7/7/2019 Only individual taxpayers can have a hobby. By converting a hobby into a business there is the advantage of having some previously private expenses being made tax deductible.These expenses include car expenses, home office expenses, travel expenses, training expenses, etc. What is even more advantageous is that if the expenses of the business exceed the income, you have a situation where the taxpayer now has a loss that may be either carried forward to the next year, or potentially be applied to his/her other income. So when exactly does a hobby become a business? If the hobby possesses the following characteristics, it may very well be a business:
When in doubt for any of the above, it would be recommended that you enlist the help of a qualified tax accountant, who will be able to assess your specific situation.
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