rjs
Level 15
Level 15

Business & farm

Whether it's a hobby or a business, you have to report the income on your tax return. The difference is whether and how you can claim expenses, and whether you can claim a loss. If you are doing it to "make some extra money," that sounds like you intend it to be profitable, which is one of the factors that suggests it's a business.


There's no minimum amount of time that you have to conduct the activity in order for it to be considered a business. If you're starting a new business, it's a business the first day. And there's no minimum amount of money that you have to make in order for it to be considered a business. As long as you make a profit most years, you can consider it a business. If you claim losses for several years in a row, the IRS might question whether you are seriously running it as a business.