Does the IRS Consider Your Quilting a Hobby or Business?

Mary Emma Allen — Tue, 08 Jul 2008 01:23:22 +0000

If you’ve begun to earn some income from your quilting or related activities, when does this transition from a hobby to true business?

Jean Murray, at Small Business Boomers, has a great post with information about what the IRS (Internal Revenue Service in the US) considers a true business. You might like to check out her, Boomers Retiring to “Fun” Businesses: Is birdwatching a business?

She mentions some of the criteria the IRS uses to determine whether you’re en titled to deduct your losses from the business you’re operating or starting up. Jean does mention that writing is one business that’s easier to justify some of your expenses under the “hobby loss” rules than others. So if you’re a writer, as well as a quilter/fabric artist, some rules may apply to you that won’t to others…and vice versa.