Frank Ellis has published a new article that targets hobbyists who earn an income based on their talents, with five important tax tips.
Traverse City, MI -- (SBWIRE) -- 09/04/2015 -- Traverse City Tax Preparation Examiner Frank Ellis has revealed five tax tips for hobbyists who bring in a source of income via their talents. This income must be reported when filing taxes, he reveals, which is done differently than reporting business income. For example, there are also rules and limitations regarding deductions. Five tips in this area are listed throughout the article.
The first is to differentiate whether it's a hobby one is passionate about or a business that exists solely to profit. Ellis also discusses allowable hobby tax deductions. He goes into ordinary and necessary expenses, and refers to IRS Publication 535 that explains what deductions are available to hobbyists during tax season.
Expense limitations are also explained. One can deduct up to the amount of income from a hobby. Losses, or expenses exceeding the income generated, cannot be deducted from any other type of income.
The author also touches on deducting expenses. He explains a little about itemizing deductions and the three types of expenses that can be deducted, which are reported on Schedule A.
Lastly, online tax filing is recommended as hobbies can make filing taxes more complicated. People can file with H&R Block Online while using an electronic version of IRS paper forms is also suggested. A number of other links are provided regarding information on IRS tax refunds, forms, refund calculators, and more.
To learn more about tax tips for hobbyists, read the examiner.com article published by Frank Ellis at http://www.examiner.com/article/five-tax-tips-for-hobbies-that-bring-income.
About Frank Ellis
Frank Ellis is a Traverse City Tax Preparation Planner and published author. He has written tax and finance related articles for eight years and has published over 900 articles on leading financial websites.
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