Can I deduct essential expenses paid from my spouse's bank card that were used for running my personal blog?

[RedWineDragons]

I started a blog for which I need to run subscriptions (hosting, stock photo services, professional e-mail accounts, etc) that were all paid from of my spouse's personal bank card this past year.  Can I claim these expenses on my taxes when filing married but separately as a sole proprietorship? I have receipts/invoices for each expense/ each item / each month that all tie back to the website.

Thanks for your kind help.

[CatinaT1]

It depends. Is this a business you intend to make a profit from or a hobby?

Millions of people enjoy hobbies that are also a source of income. From catering to cupcake baking, crafting homemade jewelry to glass blowing -- no matter what a person’s passion, the Internal Revenue Service offers some tips on hobbies. 

Taxpayers must report on their tax return the income earned from hobbies. The rules for how to report the income and expenses depend on whether the activity is a hobby or a business. There are special rules and limits for deductions taxpayers can claim for hobbies. Here are five tax tips to consider: 

Is it a Business or a Hobby?  A key feature of a business is that people do it to make a profit. People engage in a hobby for sport or recreation, not to make a profit. Consider nine factors when determining whether an activity is a hobby. Make sure to base the determination on all the facts and circumstances. For more about ‘not-for-profit’ rules, see Publication 535, Business Expenses. 
  

Allowable Hobby Deductions.  Within certain limits, taxpayers can usually deduct ordinary and necessary hobby expenses. An ordinary expense is one that is common and accepted for the activity. A necessary expense is one that is appropriate for the activity. 
  

Limits on Hobby Expenses.  Generally, taxpayers can only deduct hobby expenses up to the amount of hobby income. If hobby expenses are more than its income, taxpayers have a loss from the activity. However, a hobby loss can’t be deducted from other income. 
  

How to Deduct Hobby Expenses.  Taxpayers must itemize deductions on their tax return to deduct hobby expenses. Expenses may fall into three types of deductions, and special rules apply to each type. See Publication 535 for the rules about how to claim them on Schedule A, Itemized Deductions. 
 

[RedWineDragons]

Hi thanks for your help!

I have no idea whether to consider it a hobby or business.  Here are the answers to the questions you provided me.  

Question

How do you distinguish between a business and a hobby?

Answer

In making the distinction between a hobby or business activity, take into account all facts and circumstances with respect to the activity. A hobby activity is an activity not done for profit. This includes activities done mainly for sport, recreation, or pleasure. No one factor alone is decisive. You must generally consider these factors in determining whether an activity is a business engaged in making a profit:

• Whether you carry on the activity in a businesslike manner and maintain complete and accurate books and records. - Yes I maintain records
• Whether you have personal motives in carrying on the activity. - not sure what this means.
• Whether the time and effort you put into the activity indicate you intend to make it profitable. - yes I intend to continue making it profitable and grow it.
• Whether you depend on income from the activity for your livelihood. - no it does not currently provide my livelihood as it does not earn enough.  Down the line it is my hope desire and intention to use the income to help support my family but it does not currently make enough.
• Whether your losses are due to circumstances beyond your control (or are normal in the startup phase of your type of business). - not sure what this means I only know I can't control the amount of traffic I receive which is what contributes to the earnings.
• Whether you or your advisors have the knowledge needed to carry on the activity as a successful business. - I don't have advisors. its just me.
• Whether you were successful in making a profit in similar activities in the past. -  I have no similar activities in the past to compare to.
• Whether the activity makes a profit in some years and how much profit it makes. - It has never made profit before, this is the only and first year I have made profit.
• Whether you can expect to make a future profit from the appreciation of the assets used in the activity. - not sure what appreciation of assets are.  My only form is earning is: affiliate marketing/pinterest creator programs/google Adsense.  

Can you tell based on my answers whether this is a hobby or a business? 

Thanks for all your kind help.

-Vanessa

[CatinaT1]

I would say based on this, you are a business.

If so, you are self-employed and file a Schedule C. 

These links will be helpful to you: 

Self-Employed Tax Center  

Tax information for Businesses  

   

To file a Schedule C, here are the steps:  

• Sign in to your account and select Pick up where you left off  
• At the right upper corner, in the search box, type in schedule C and Enter   
• Select Jump to schedule C   
• Follow prompts, you might be prompted to an upgrade if you have expenses