ed wrote:
- quote -

Another excellent point. If my regular consulting biz gets me above the
FICA ceiling, then the answer is "yes". Otherwise, you're right: the
deductible expenses will be wiped out by SE tax.

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On Feb 7, 5:52*pm, Alan <sfcnm-...[at]yahoo.com> wrote:
- quote -

You should have been doing this on a Schedule C since incedption.
Sounds like it was your choice to put it on line 21. The "hobby" thing
is a forced issue with the IRS, not something you should try to
satisfy. If they can't prove you lost money in 3 of the past 5 years
they can't force you into hobby status. You could lose money forever
and not be a hobby if you are in business to profit, hopefully.

The flip side is that on line 21 you didn't have to pay SE taxes of
over 15%. Are you sure you don't want to be a hobby??

ed

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Alan wrote:
- quote -

Yup, 'cause otherwise, "You depend on the income for your livelihood"
would be a killer, and that would be true for an awful lot of people
with side businesses, such as Amway (does Amway still exist?).

Interesting. Thanks very much for the pointer!

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rlsusenet[at]NOSPAMPUHLEEZschnapp.org wrote:
- quote -

http://www.irs.gov/publications/p535/ch01.html#d0e885

Don't miss the line that says: No one factor alone is decisive.

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Can someone point me at the elements that distinguish a business
(Schedule C) from a hobby (1040 line 21 "other income")?

Here's the thing: I do a lot of contesting (participate in local
radio/TV station promo programs, sweepstakes, etc.). I have some small
expenses, primarily the costs of driving to the stations to pick up
prizes. I could also make a case that a small proportion of my internet
connection costs are attributable to this enterprise.

I've made money at this enterprise for the last 3+ years, and would have
still made money even if I had been able to deduct my expenses.

I'm considering declaring this to be a Schedule C business so that my
expenses are not unreasonably limited by the 2% AGI floor.

Does anyone have any thoughts on this?

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