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Old 01-27-2011, 04:52 PM   #18 (permalink)
kajshack
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Join Date: Nov 2009
Location: California
Posts: 4,377
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Quote:
Originally Posted by raiderguy10 View Post
I am a CPA who prepares tax returns.

You are responsible to claim income on ALL receipts regardless if you receive a 1099 or not. If you make over $20,000 and have over 200 transactions on Paypal they will send you a 1099. You are required to report ANY amount of income and you are responsible for any income you make, whether it's below $20,000 or not.

Lots of people will tell you just to claim it's a hobby. That doesn't help you any either. You still have to claim hobby income, and your expenses are only deductible if 1) you itemize your deductions, and 2) they are subject to a 2% AGI limitation floor. You are better off having it be a business than being a hobby because most people won't be allowed to claim hobby deductions.
Raiderguy, I know you aren't here to give free advice, but just a quick question: for the majority of us who spend way more than we take in with this "hobby", if we are organized as a sole-proprietorship we can deduct business losses and expenses such as supplies, etc correct?
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