I started a side business LLC in 2023 as an art vendor as I really want to make and sell art. I tried for 2 years so far and haven't turned the profit. After a while I know I'll be flagged as hobby. This year alone I spent more than double I made from commissions and sales on machinery and inventory. If my business is downgraded to a hobby is it the end of the world for me?
Is it the end of the world if the IRS determines your business is a hobby?
byu/dtgray12 intax
Posted by dtgray12
3 Comments
talk to a cpa is best.
Just means you won’t be able to keep writing the loss off.
No pay your taxes or hire a cpa and fight it.
FYI the irs takes a bad view of writing of continual losses vs regular income.
Another idea is carry forward the losses on the balance sheet.