Sporadic Photography Book Sales

[cbales15]

Hello - I am a full time W2 employee in an unrelated field but take pictures more or less for fun. However, this year I will put out a small run of books with my photography for sale. I am planning on ordering 250 books that will cost $9250 to make and the revenue from that would be $12,500 netting $3250 in profit.

I ideally would like to treat and report the profit ($3250) received as hobby income in my normal tax filings but my understanding is that if it is hobby income then I would have to pay income taxes on the full revenue amount ($12,500) regardless of the fact that I had to pay $9K in costs to order the books. That would raise my income tax liability by $2K more than if it was only on the profits.

I am not intending to make this into an ongoing business and would like to avoid the hassles of filing a schedule C since I would only be having a business profit once every 3-5 years when I decided to make a new book. Any help would be appreciated!

[Bsch4477]

You have to decide whether you can justify your decision to have a hobby or business to the IRS. But since you plan on making a profit it sounds like a business to me. The IRS has published guidelines. 

https://www.irs.gov/newsroom/heres-how-to-tell-the-difference-between-a-hobby-and-a-business-for-tax....

[rjs]

In addition to expecting to make a profit, if you plan to do this every 3 to 5 years, that sure sounds like an ongoing business.

Filing Schedule C is not much of a hassle. For a simple business like yours it will take 5 or 10 minutes to enter the information into TurboTax. The Schedule C is included in your tax return, so there's no additional effort to file it.

Note that if this activity starts in 2024 and concludes in 2025 you will have to report it in both years. TurboTax will transfer the business information from 2024 to 2025, so filing Schedule C in 2025 will be even easier. You will just have to enter the 2025 income and expenses.