Originally Posted by
catlinye_maker
Just to add to what everyone else has said: the IRS considers that to qualify as a business you have to make a profit two years out of five. If that's not the case, then it's classified as a hobby, and not deductable.
Exactly. I DO have an in home business...not sewing or quilting. Our tax guy explained everything to me about hobby/business. I pour candles...have been since 2000. I have a separate workshop...do not sell out of it though. I do craft shows and I have a Christmas Open house here in my home. I also DO sell candles to people...but like I said...I don't have a store. Anyway...I do NOT use my workshop as a tax writeoff. As someone else said...our tax guy also told us that IS the biggest red flag to end up being audited. The only thing I do is income/expenses...there's a name for it but I can't remember it now...lol. I have actually kept ALL of my receipts since the day I sold my first candle. I do have a PA sales tax license so when buying supplies in state I don't have to pay 6% sales tax on them. But...as soon as I sell candles I have to report and pay the 6% sales tax that I have to charge the customer.
I would be scared to death to try to declare stuff that isn't really legit.