@Bluepeace123 wrote:
That's not exactly what I was asking. I apologize for not being clearer. How much does the IRS tax a person for income made from a hobby vs. the amount a person is taxed on profit from self employment? Thanks
It's complicated.
With a hobby, you pay income tax on your income. You are not allowed to deduct expenses, such as travel, booth rental, listing fees, credit card fees, shipping, tools, home office, and so on. (I have seen different opinions on whether you can deduct the cost of materials.)
With a business, you pay income tax plus 15% self-employment tax, but only on your net income after subtracting all your costs, including costs for materials, inventory, selling fees, shipping, tools, and so on.
