Recommended Home Business

Home Business | Work at Home opportunities and ideas.

Does The IRS Consider Your Home Business A Hobby? - Work From Home resource serving business opportunity seekers since 2001 providing the work at home opportunities, resources, tools and ideas needed to succeed with a home business. Risk-free invitations to find out how you can make money from the comfort of your own home.

Top Pick At Home Opps:

That Free Thing

No Sponsoring Business

Mystery Shoppers

Business at Home

Typing Jobs from Home

Make Money with Rebates

Take Surveys for Money

Make Money Taking Photos

Freelance Home Writer Home Jobs

Shopping Genie

Would you like to totally eliminate your grocery bill, but still enjoy the same name-brand items you get now PLUS generate a powerful income stream?

Name: Email:
Privacy Guaranteed

Home Business Reviews
MPB Today Review

My Shopping Genie Review

Free and Powerful Review

GDI Review

work at home data entry

Get Paid Writing on the Internet

Make Money with Amazon Associate Program

Data Entry Jobs
Rebate Processor Jobs

Do They Really Pay?

Editor's Features:
data entry job reviews Data Entry Job Reviews

free online dollar store Free Online Dollar Store

work at home jobs Work at Home Jobs

ebay work at home Work at Home eBay

work from home business Work at Home Australia

Paid Online Surveys Guide Paid Online Surveys Guide

Top Ten Ways to
work at home Make Money at Home

The Best, Most Legitimate:
work at home Home Based Businesses
work from home Business Opportunities
work from home Free Affiliate Programs

Post Resumes for free on our Work at Home Jobs page.


Expert Guides

-Work at Home Dads

Home |  Directory |  Suggest a Site |  Blog |  Marketing |  Articles |  Forum

Articles Home | Work at Home Articles | Home Business Articles | Money Making Articles | Web Promotion Articles

Does The IRS Consider Your Home Business A Hobby?

In an article published in TAXES magazine, Bruce J. Squillante, Senior Tax Attorney at Amway Corporation, addresses the so-called "hobby-loss rules," and how it applies to network marketers.

What exactly does the term "hobby-loss" mean? In the most basic terms, distributors must run their network marketing home businesses with the intention to make a profit in order to legally deduct losses from their business against other income. The problem is that the definition of "for profit" is not as simple as you’d think. Existing laws require that in order to qualify for business deductions, every business, almost without exception, must show a profit in at least three out of five consecutive years. If you don’t, then the IRS can seek to prove that you are really only engaged in a hobby without profit motive. That means no deductions.

The law provides a "presumption" to taxpayers that their activities are engaged in for profit if certain condition are met. However, as the article points out, "There is no single dispositive factor. A determination of profit motive is not made by comparing the number of factors showing a profit motive to those showing a lack of profit motive." Below is a brief summary of the relevant factors:

1. Did the taxpayer get advice? Seeking out the advice and expertise of others may be a sign of profit motive. This is one more benefit of a Leaders Club subscription!

2. In what manner does the taxpayer conduct business? This might include keeping good records, perhaps a separate checking account, but the definition of "manner" is vague at best.

3. How much time and effort does the taxpayer spend on the activity? The IRS may look more closely at distributors who work the business part-time. This is were the Leaders Club activity tracking worksheets can have an additional value.

4. Is the business being run like similar profitable businesses? Advertising your business, getting leads, and using promotional materials are all evidence of a profit motive. Again, something a simple Leaders Club subscription can provide.

5. Has the taxpayer had prior home business success? If you’re new to the business, the IRS may consider your profit motive questionable. Evidence of serious study and purchase of additional training, seminars, courses or coaching (all available through Leaders Club) can compensate for that.

6. What is the taxpayer’s history of income or losses in the business? A distributor whose expenses greatly exceed income may find it challenging to show a profit motive.

7. What is the taxpayer’s financial status? The more income you earn through other sources, the less likely it is that the IRS will recognize your business losses.

8. Is the taxpayer in it for pleasure? If a taxpayer takes significant personal pleasure in the activity it is more easily perceived as a hobby.

As a businessperson you have a large number of possible deductions available to you that are not available to those who do not have a business. Leaders Club recommends a little common sense when figuring what expenses should or should not be deducted and always seek the advice of a Certified Public Accountant or Tax Adviser.

Click Here to Learn More about Leaders Club

Disclaimer: The information presented and opinions expressed herein are those of the authors and do not necessarily represent the views of and/or its partners.
The Following have been Selected by the Work at Home Business Team:

Make Money without Spending Money
The only way you can actually earn good money without spending money.

Work at Home Moms (or Dads)!
Create a serious income in the fun and exciting home based business industry. Become an independent home-based business owner agent in as little as one week!

Free Online Dollar Store
Dollar Stores are one of the fastest growing businesses in America today. You can own your own Online Dollar Store in less than 5 minutes. It's ABSOLUTELY FREE.

Turnkey Home Based Business
Get paid $1,000 before this day is over with this turnkey, automated business opportunity!

Powerful Opportunity for Work at Home Moms
Find out how thousands of Stay at Home Moms became millionaires on the internet last year! A team of home business professionals partnered together in mutual respect for the purpose of mentoring others and developing home based business leaders.

Successful Home Based Business
Are you sick of your job? Are you sick of being tired and stressed? Find out how you can quit your job and improve your health!

Real Work at Home Jobs
Find thousands of job listings that you can do from home!

Enjoy Life - Create Wealth with a Home Business
More money. Free time. Total control. Start a real home business today! You'll get your own personal home business trainer!

Data Entry Business Opportunities
Experts call this the easiest way to Make Money Online...PERIOD!

A Home Business that You'll Love
$3,000 Per Week? Travel company needs home representatives. No experience necessary, work in your spare time and earn free vacations!

Make Money Shopping and Eating!
Imagine getting paid to fill up your gas tank... to shop for groceries... rent videos... order pizza... shop for clothes... get a spa massage... take your family to a theme park... and even be pampered on a luxury cruise for two... FREE OF CHARGE!

Free Home Business Match Services
More Scam Free Internet Business Opportunities

All rights reserved - | Back to Top

Sponsors: Start a Get Paid on Twitter | Free Home Job Resource | Income Opportunities | Make Money Taking Photos | Home Based Business | Work at Home Australia | Groceries for Free!