J.K. Lasser's Small Business Taxes 2018

CHAPTER 26 Tax Strategies for a Sideline Business

1. Reporting Sideline Business Income
2. Hobby Losses
3. Business Expenses

Alert

At the time this book was completed, Congress was considering important tax changes that could affect 2017 tax returns and planning for 2018. Check the online Supplement in February 2018 at www.jklasser.com or www.barbaraweltman.com to see what changes have been enacted and when they are effective.

Millions of Americans today have a sideline business, especially today when many have only part-time jobs or are underemployed. Having a sideline business has become easy with the advent of eBay, Etsy, and other online marketplaces. The “gig” economy, with options for part-time and freelance work through Uber, TaskRabbit, Upwork, and others, also provides sideline business opportunities. But sideline businesses, such as dog breeding and gentleman farming, have been around for years.

Starting and running a sideline business can be a savvy move. It can be a way to supplement your current income. It can be a safety net in case of a job dislocation. And it can be a way to test the waters for a full-time business in the future, say, on retirement.

For a further discussion of business expenses, see IRS Publication 535, Business Expenses.

Reporting Sideline Business Income

There's a basic rule when it comes to income from a sideline business: You must report it. There is no minimum revenue or number of sales you must make before income becomes reportable. ...