a hobby business that i make handmade gift. purchased a laser to make ornaments it was about $5000 do i put that as an expense? or leave it off.

You cannot deduct expenses for a hobby.   So....is it hobby income---or self-employment income?   If you have self-employment income, you can prepare a schedule C for business expenses but you must also pay self-employment tax for Social Security and Medicare.

If it is a business, it does not have to be an LLC, it is can just be a business.  If you are making handmade custom gifts per order this is likely a business with the intention of making a profit. If you are buying equipment so you can sell your items, this would likely fall on the side of a business. If treating this as a business, then you can enter this as an asset and take a deduction for it.

 

Here’s how to tell the difference between a hobby and a business for tax purposes