tax questions?

[Angelsx3]

this year I made about 1900.00 at a local Crafters mall. I didnt get a business id or anything of that nature. I filed it under other income this year. Didnt bother with the itemized to get money back. This year however I am going to file and get the proper id and all that jazz.
We filed our taxes last week and today I get a paper in the mail for property tax through our county. That I have to give and inventory list and value. What is this? Our tax refund dropped 400 dollars when I added in what I made, and now this. I'm starting to rethink what I'm doing. Anyone have any thoughts, what I am doing wrong and so forth. I'm trying to make this as profitable as possible.

[bushfamily]

We use turbo tax, and we did our taxes last night. I just listed it under "hobby income"

Is that how you did it last year? I claimed $950 in income and only lost $100 of the return.

That's all I know about taxes, I didn't put in any expenses.

[Angelsx3]

I will definately keep track next year with receipts, expenses and so forth. That 1900.00 was only for 5 months. So I guess it was a good start, hopefully that will be better this year. So this is considered hobby income? Where is that located on the tax form, my dh included it under other income.

I found out that I have to pay property tax on the inventory at my cost. Which shouldnt be that much according to the lady I spoke too.

[mbland]

According to Turbo Tax there is a place for hobby income. If it is more than 1200 you get to write off 2% off the expenses. More than that or if you file a hobby income more than 3 years they consider it an business. This is a tricky one because once you are declaring yourself a business you get to write off all your expenses so they start watching closer at your stuff because alot of folks will claim business so they can write it all off and the IRS likes you to stay at a hobby level.

[bushfamily]

wow, that's some great info. mindy. Thanks.

[mbland]

CCH Financial Planning Toolkit | Hobby Loss Rules

Turning Your Hobby Into a Business

Business or Hobby? Answer Has Tax Implications

Here are a few things Heather. The irs.gov is a wonderful resource for alot of questions. I am going to lean that your time that you invest is not able to be "wrote off". I will do some more looking for you though.

Oh, and when you file as a business, you can count a lose for so many years, I would check into that also.

[jymaldonado]

Originally Posted by mbland

CCH Financial Planning Toolkit | Hobby Loss Rules

Turning Your Hobby Into a Business

Business or Hobby? Answer Has Tax Implications

Here are a few things Heather. The irs.gov is a wonderful resource for alot of questions. I am going to lean that your time that you invest is not able to be "wrote off". I will do some more looking for you though.

Oh, and when you file as a business, you can count a lose for so many years, I would check into that also.

Yes on you can only count a lose for so many year. I can't remember how long either. My dad had a pool cleaning business that was losing money for many years... Then he got audited. ( because after you claim lose on your buessiness for a certain number of years, your SS# will get a red flag with the IRS). It was no fun... He ended up having to pay the IRS an extra $4500 after getting audited.

[Princess Babies Bowtique]

your best bet is going to be irs.gov; you do not want to make a mistake!

The tax man cometh...