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Archive for the ‘Hobby Loss Rules’ Category

PostHeaderIcon Taxes for Bloggers

I’ve had a blog since 2003.  Over eight years ago I started my Tigers fan site, Tigerblog and since then, my life hasn’t been the same.  I’ve been in books, been on the radio and I even had the chance to interview Ernie Harwell.  I place it as one of my most important life decisions I’ve ever made.  Another good thing is, it’s made me some money.  I’ve sold ads throughout the years and it’s forced me to treat it as a business.  That’s why I did this interview back in back in 2005 on accounting for bloggers.  Once money starts coming in, it’s time to take it a little more seriously.

If you read through the interview (which is focused more on baseball blogs), not a lot has changed since then.  One thing you always have to keep in mind is the general rule for a business deduction and that’s that it has to be ordinary and necessary.  If you start a movie review blog and you write a review on every single movie you see and you only deduct the price of the ticket for you and not everyone in your family, you’ll probably be in good shape.  If you write a review for every fifth movie you see and you try to deduct the price of your ticket, the price of the tickets for everyone in your family and then a family dinner on top of that, you might be in trouble.

Also be cognizant of the hobby loss rules.  Eventually you should turn a profit and if you don’t, then your losses may not be allowable.  While the hobby loss rules have some general guidelines (this may warrant a post of it’s own), even if you meet the requirements, the IRS could still deem you a hobby under audit so nothing is bullet proof.

PostHeaderIcon Tax Bits – 5/16/2011

You won’t see these every day but I’ll be doing Tax Bits when there are important due dates or rulings that I find.  On with the bits….

1)  If you’re a tax-exempt organization, your Form 990 is due today.  You can get a three month extension by filing Form 8868, which you can find here.

2)  If you’re looking ahead, the IRS put out the 2012 deduction limits on Health Savings Accounts (HSAs) in Rev. Proc 2011-32.  The annual limitation on your deduction if you’re single is $3,100 and it’s $6,250 with family coverage.

3)  The IRS recently put out their Audit Technique Guide on the wine industry.  There’s a lot of material in here but these ATG’s are worth the read if you’re dealing with the issue at hand.

4)  Taxgirl’s latest is on the pros and cons of another tax holiday for company’s to repatriate their earnings.

5)  The latest at the WSJ Tax Report blog has a discussion on new breaks for company cars.  Well worth the read if you own your business and you’re in the market for a new car.

6)  The Intuit Small Business Blog has a piece on how whether the IRS views your business as a hobby or not.  Check this out if you think you’re on the fence.

So lots of good stuff here.  If you want more frequent updates, be sure to follow me on Facebook or Twitter.