As I understand it, when the IRS takes their share out of the money I get from quilting, I can deduct the costs involved in making that income. I can't deduct more than the income, so if I make $100, I can't claim it cost me $200 to make something and deduct it.
I don't remember if my accountant deducts for the sewing room, but if he does I can guarantee that it is only used for quilting unless you walk on four feet and need the litter box - the room doesn't double as a bedroom or storage room, and apart from the litter box, everything in it relates to quilting.
If I get audited, so be it, although it would be huge waste of time and taxpayer money. I have my receipts saved and I'll be glad to show them exactly what I spent. I'm not making much more than pin money, and even with the deductions I usually have to pay.
Janet