Cari Shanklin, CPA

11/05/2024

From my favorite news source The Pour Over

06/05/2024

Issue Number: Tax Tip 2024-55
Hobby or business: What people need to know if they have a side hustle

Hobbies and businesses are treated differently when it comes to filing taxes. The biggest difference between the two is that businesses operate to make a profit while hobbies are for pleasure or recreation.

Whether someone is having fun with a hobby or running a business, if they are paid through payment apps for goods and services during the year, they may receive an IRS Form 1099-K for those transactions. These payments are taxable income and must be reported on federal tax returns.

There are a few other things people should consider when deciding whether their project is a hobby or business. No single thing is the deciding factor. Taxpayers should review all the factors to make a good decision.

How taxpayers can decide if it's a hobby or business...

These questions can help taxpayers decide whether they have a hobby or business:

~Does the time and effort they put into the activity show they intend to make a profit?

~Does the activity make a profit in some years, and if so, how much profit does it make?

~Can they expect to make a future profit from the appreciation of the assets used in the activity?

~Do they depend on income from the activity for their livelihood?

~Are any losses due to circumstances beyond their control or are the losses normal for the startup phase of their type of business?

~Do they change their methods of operation to improve profitability?

~Do they carry out the activity in a businesslike manner and keep complete and accurate books and records?

~Do the taxpayer and their advisors have the knowledge needed to carry out the activity as a successful business?

Whether taxpayers have a hobby or run a business, good recordkeeping throughout the year will help when they file taxes.

Learn about recordkeeping, and how it helps you monitor the progress of your business, and prepare your financial statements and tax returns.

07/31/2023

If you receive a letter or notice from the , make sure to read the letter carefully and take any requested action. Remember, first contact from the IRS usually comes in the mail. Watch out for scammers requesting payment over social media or text message.

Learn more: https://ow.ly/uHVJ50PbW5m

07/11/2023

IRS Warns of New Tax Refund Mail Scam

If you receive a cardboard envelope appearing to be from the IRS about an unclaimed tax refund, be cautious. It’s a scam.

If you receive a cardboard envelope appearing to be from the IRS about an unclaimed tax refund, be cautious. It’s a scam.

05/01/2023

ONLINE LEARNING OPPORTUNITY FOR SMALL BUSINESS OWNERS

Are you a small business owner?
Do you feel lost in a sea of information?
Are you concerned about your business tax responsibilities?

If you answered "yes" to above questions, there is good news! The IRS has made available a series of 8 videos known as the Small Business Virtual Tax Workshop.

This FREE and convenient workshop is available 24/7 and can help new and experienced small business owners learn about topics relevant to their business.

https://www.irsvideos.gov/Business/SBTW?seg=3156

02/03/2023

Protect yourself by choosing a paid tax preparer who meets IRS requirements. For more information, go to https://www.irs.gov/chooseataxpro.Follow us:Twitter ...

01/13/2023

The IRS has announced that it will begin accepting 2022 efiled individual tax returns on Monday, January 23.

Be on the lookout for your tax season welcome packet in your mailbox next week!

09/14/2022

09/04/2022

Taxpayers should be sure to have all their info before going to a tax pro

Taxpayers using a professional tax preparer should make sure they have all their information readily available before their appointment. Collecting their information and getting copies of any missing documents before taxpayers sit down to prepare their return is critical to filing an accurate tax return. Having organized records and information in hand helps prevent filing errors and will likely create a smoother filing experience.

09/02/2022

People should donate carefully after a disaster to avoid scams

After an emergency or disaster, people rally to help victims by donating money. Unfortunately, this can give criminals an opportunity to prey on them by soliciting donations for fake charities. Scammers may also pose as federal agencies to dupe disaster victims trying to get disaster relief.

People should always be suspicious of unsolicited contact. Scammers often contact their possible victim by telephone, social media, email or in person.

Secure .gov websites use HTTPS A lock () or https:// means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.

08/31/2022

From markers to face masks, classroom supplies may be tax deductible

Teachers go above and beyond for their students, often buying classroom supplies needed to make learning successful. The educator expense deduction allows eligible teachers and administrators to deduct part of the cost of technology, supplies and training from their taxes. They can only claim this deduction for expenses that weren’t reimbursed by their employer, a grant or other source.

08/29/2022

Worker Classification 101: employee or independent contractor

A business might pay an independent contractor and an employee for the same or similar work, but there are key legal differences between the two. It is critical for business owners to correctly determine whether the people providing services are employees or independent contractors.

Tax Tip 2022-117, August 2, 2022 — A business might pay an independent contractor and an employee for the same or similar work, but there are key legal differences between the two. It is critical for business owners to correctly determine whether the people providing services are employees or inde...