Art Marketing Boot Camp™: It’s Tax Time: What Artists Can Potentially Deduct

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April 07, 2015


Katherine Tyrrell

Just to avoid any confusion on the hobby vs business front, it's also well worthwhile having a read of the IRS Publication Publication 535 "Business Expenses" For use in preparing 2014 Returns

In particular in relation to what the differences are between a hobby and a business. Bottom line you can't claim business expenses for a hobby.

To quote:

"In determining whether you are carrying on an activity for profit, several factors are taken into account. No one factor alone is decisive.
Among the factors to consider are whether:
* You carry on the activity in a businesslike manner,
* The time and effort you put into the activity indicate you intend to make it profitable,
* You depend on the income for your livelihood,
* Your losses are due to circumstances beyond your control (or are normal in the start­up phase of your type of business),
* You change your methods of operation in an attempt to improve profitability,
* You (or your advisors) have the knowledge needed to carry on the activity as a successful business,
* You were successful in making a profit in similar activities in the past,
* The activity makes a profit in some years,
* You can expect to make a future profit from the appreciation of the assets used in the activity."

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