There one of two tests that someone needs to pass in order to be considered a business instead of a hobby. The first is the simpliest, you need to show profit in 3 out of 5 years of business. According to her book she hadn't done that yet. So in that case you need to justify your business to the IRS.
We're basically in the business of Arts and Crafts. While there are plenty of working selfsustaining artists, there are also many many many many many more people who just paint or take photos as a hobby. For someone just starting out at this, the line between business and hobby is kind of blurry. For someone just starting out with a shoe store, it's kid of hard to argue that it's a hobby.
________________________________________
From: artshow_photo@yahoogroups.com [artshow_photo@yahoogroups.com] On Behalf Of Michael Pearlman [mike.pearlman@gmail.com]
Sent: Friday, December 17, 2010 10:04 AM
To: artshow_photo@yahoogroups.com
Subject: Re: [artshow_photo] Re: Newbie question re Federal Income Tax on startup photography business
Maria,
IRS agents have a difficult job under the best of conditions, are probably
poorly paid and have too many "clients."
The only thanks they get are milking more money out of tax payers some who
are trying to save as much money
as they can. BUT the tax code makes it clear that citizens have the right
to pay the least amount of tax that
they can legally.
If the auditor was serious in asking you a question about your reasons for
being in
the business of selling woodcuts he was out of line. The method of your
earning
income is actually none of his business. Their job is only and simply to
make sure
that you meet the tax code and that all funds due the govt. are collected.
My answer to his question would have been "Why do you work for the IRS?
Why don't you get a real job where you can prove your creativity? Maybe
selling shoes would be a better fit for a person with your skills!
Michael
On Fri, Dec 17, 2010 at 6:38 AM, alexdemyan <aldemyan@cox.net> wrote:
>
>
>
>
> --- In artshow_photo@yahoogroups.com <artshow_photo%40yahoogroups.com>,
> "Maria Arango Diener" <1000woodcuts@...> wrote:
> >
> > Yep, thanks for bringing it up! LOL
> >
> > The IRS agent actually asked me the following question:
> > "Why do you sell woodcuts? Why not something proven, like women's shoes?"
> >
> > Surreal...nightmares...brrrrrr...women's shoes???
> >
>
> For those of you still interested in liberty, don't forget to educate
> yourself on the Fair Tax, the national sales tax. www.fairtax.org
>
> Alex Demyan
> louisianaphotos.com
>
>
>
--
*Michael*
ChristopherMichael.com
[Non-text portions of this message have been removed]
------------------------------------
Donate to support the ArtShowPhoto Forum at
http://artshowphoto.com/support.htm
PLEASE READ....PLEASE TRIM POSTS!!! Keep quoted material short.
Repeat or create accurate subject lines.
If you want to advertise services related to art shows or photography, either in a forum post or on the resource web site, please contact the forum owner for permission.
Resource web site at
http://ArtShowPhoto.com
Yahoo! Groups Links
http://artshowphoto.com/support.htm
PLEASE READ....PLEASE TRIM POSTS!!! Keep quoted material short.
Repeat or create accurate subject lines.
If you want to advertise services related to art shows or photography, either in a forum post or on the resource web site, please contact the forum owner for permission.
Resource web site at
http://ArtShowPhoto.com
0 comments:
Post a Comment