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650ninja2010
New Member

I've been filing small business but it's turned into a part time hobby how should I file?

 
1 Reply
MelaineC
Level 1

I've been filing small business but it's turned into a part time hobby how should I file?

To enter hobby income and expenses in TurboTax please follow these steps:

  • Sign in to your TurboTax account
  • Click on Federal Taxes tab
  • Choose Wages and Income
  • Scroll down to Less Common Income and click Start to right of Miscellaneous Income, 1099-A, 1099-C
  • Click Start to right of Hobby income and expenses

The IRS doesn't allow you to deduct hobby expenses directly from hobby income. Instead, you can deduct expenses as an itemized deduction subject to 2% of your adjusted gross income. Also, the amount that you claim as an expense cannot be greater than your income from the hobby. In other words, your hobby cannot generate a loss.

Taxpayers can choose to itemize expenses on their tax returns or take the standard allowable deduction. Hobby expenses can only be deducted if you itemize your deductions.

If you don't have any other itemized deductions, TurboTax will deduct the greater of the standard deduction or itemized deductions. TurboTax will choose the one that lowers your overall tax liability.

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