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Tax question: Hobby or Business?

Established Member

Tax question: Hobby or Business?

I'm not sure if this is the right place for this, but I was hoping someone could at least point me in the right direction.

I've done searches to find a tax forum similar to myFICO (but for tax issues), but haven't really found anything geared toward people who aren't tax professionals.

 

My girlfriend is a blogger and also working part-time on finishing her degree.

I'm basically trying to determine if it makes sense to treat her blogging as a business or as a hobby.

She uses TurboTax to file online.

 

She treats blogging like a full time job.  I've seen the IRS's lists comparing the two.

Although she has been doing this for a few years, she has never written off any of her blogging expenses.

Her income was between $3,000 and $4,000 last year from blogging.

She goes to multiple conferences and has plenty of other expenses and could probably write off triple her income if it was allowed.

Besides the blogging, she helped me part-time in my business, for which I gave her a 1099 for $10,000.

 

My question is, since she has so little income, would there be any real benefit to treat her blogging as a business?

My understanding is that the difference between the two is that for a business her expenses can exceeed her income and help offset other income but I think she would only have to pay a few hundred dollars anyway (since she only has $14k total in income).

 

Or, if it *IS* a business, does it matter if there are $3,000 vs $10,000 in business expenses?  (Assuming only a few thousand in expenses would offset any tax burden for the current year.)

 

Thoughts?

Thanks in advance.


Starting Score (01/01/15): 592
Current Score (09/01/17): 691 (TU), 696 (EX), 704 (EQ),
Goal Score (12/30/17): 740

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Valued Contributor

Re: Tax question: Hobby or Business?

If it were me I would file a schedule c for income and deductions to gross reciepts only .  If she never or hardly ever shows a profit then hobby rules applies. I believe off the top of my head to show losses she needs a profit 3 out 5 years I just can't recall the exact number of years.   

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