Hi, long story short... I recently got into the hobby of fixing watches. It started purely as a hobby, but then I started taking them apart and fixing them. I started buying huge "lots" from estate sales and on eBay. As I found watches I liked, I'd get rid of other watches that I had fixed by selling them on eBay to fund new watch purchases.
I started in 2019, but my costs (tools, etc.) grossly outweighed the money I made from selling them... I think I made... maybe $1,000 on watch sales last year, but probably spent twice that on the workshop I built in my garage, plus tools, and stuff.
This year with some of the time off I had because of COVID, I got bored and (in addition to renovating my master bathroom) fixed up MANY watches. In the past 90 days, I've collected maybe $3,600 in watch sales, and I expect that to continue through the rest of the year. My guess is I'm looking at maybe $10,000 to $15,000 in watch sales.
To be honest, I'm kind of getting over it, and I'll likely stop the watch hobby since I've got more watches than I know what to deal with, but the money supplements my daughter's 529.
I live in Texas, so no state income taxes. But obviously, I will have to file for Federal. What is the best way to account for this income? What deductions, if any, can I use? I do not have any kind of business, LLC, or otherwise. I'm fully employed by a company doing totally unrelated things. Do I just determine my own expenses vs income, and then just lump that in as a second source of income in my tax filing? How do I account for hours? I'd have to say that realistically, based on the average going rate, I'm probably not even breaking even if I was to charge myself a fair wage for the services. Note, I have not taken on any requests... I literally just fix watches in my spare time and sell them on eBay.
Would love any advice you guys might have!
Thanks!!!
