Quote:
Originally Posted by sk66
Yes, that's doing business "under the table", but it's probably all right as long as it's "small time". By the IRS regulations you will have to file income tax returns on your side business if you have a "net earning" of greater than $400.
Net earning means "after expenses". A nice bonus of doing this as a "paid hobby" is that equipment can be deducted from earnings to reduce your net without having to amortize or even file... normally equipment expenses (over $5000) have to be claimed and depreciated over time, not just written off. In your case any monies spent in relation to the "business" can be directly deducted to keep the net under $400 and thus still a "hobby" and non-reportable.
FWIW, I am NOT a tax spe******t, and I am not trying to give a definitive legal answer, just the "jist of it" as I understand things...(I've been self employed in one way or another most of my adult life, right now I have a "side business" I run as a "sole proprietorship" under a DBA.)
As an aside...many kids (used to) make much more than $400 cutting lawns and it goes "unnoticed"...no-one really cares.
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Thanks, that's really helpful. Thankfully the other photographer I work with's parents are both accountants, and both of my parents have started multiple businesses. So I think I've got a few good people to help me with this. It's always great to get other input too though, so thanks for that information.