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January 13, 2025
Question

I wanted to know if I should add my business this year? I have made no profit so far just losses. I believe last year they combined it but I don’t know how with no profit

  • January 13, 2025
  • 1 reply
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Just want to know if I should even bother putting it with this years tax refund or just hold off. Thank you!

    1 reply

    January 15, 2025

    You are required to enter your business revenue and expenses even if you operated at a loss. However, since you had losses it is possible that the IRS would consider your business to be a hobby, in which case you would have to pay tax on your receipts but you would not be able to deduct your expenses under current IRS rules in 2024. The IRS has an article explaining the difference between a business and a hobby, here is an excerpt from that article:

     

     

    The main considerations are the time and effort you put into the activity, a profit motive and whether you would have other motives for carrying out the activity, such as would be the case with a hobby. The fact that you had losses in more than one year would go against you when trying to argue that the activity was a business.

     

    Here is a TurboTax article on Hobby Income that explains more about it.

     

     

     

     

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