IRS Tax Issues - New Tax Law Lets Small Business Owners Get a Tax Break

Even the Odds: It's hard to get ahead. Sometimes youcreative, but don't try to stretch your limits too far.
need a side business. Most independent workers don'tHobby vs. Business: The IRS can classify your venture
have just one business. Hairdressers also own nailtwo ways. They may see one business as a "hobby,"
salons, photographers own frame shops andwhich means less tax deductions for you! The IRS can
journalists may offer resumé building services.classify your venture as a "hobby" if you lose money
The possibilities are endless. But you have to watchfor 2 years consecutively or if you cannot provide
out. No matter how many businesses you operate, theproof that you are operating with business sense. If
IRS needs to know how much money you're makingyour business is classified as a hobby, you can only
from each. You have to watch your back and makereceive deductions up to the amount of money you've
sure you report everything correctly.earned with the hobby.
Grouping Together: If it's easier, combine yourWord of Caution: If you received tax deductions on
businesses into one. Instead of having a separate nailyour work tools for two years before your business
and hair salon, have one salon that offers both orwas classified as a hobby, you'll owe that money back!
combine your web design and photography business.And if you don't pay it back, you'll end up in debt with
This keeps you from having to file two Schedule Cs.the IRS. And you may already know how that goes.
The Catch: Your businesses need to be related. YouYou risk Tax Levies, Liens, and Seizures. So it's
cannot combine your dog walking business with yourimportant to do your research and classify your
computer repair gig. But it makes sense to combinebusinesses correctly.
your essay writing and resume writing services. Be