You’ve done it! You’ve completed a successful Kickstarter campaign or finished that big tour, edited that documentary or sold that painting. You got paid! Nice!
Checks go to the bank, then out to rent, supplies, heat, light…life, basically, right? Maybe you’re holding down the day (or night or temp) job to supplement these soul pursuits. What if your side projects could supplement themselves?
When tax time comes, consider these side projects. It is work, after all. There is such a thing as “hobby income” and “hobby expenses”. Keep track of what you spend and what you make, even if you make your money by passing the hat. You can deduct a limited amount of expenses based on your total adjusted income. Maybe those rehearsals are deductions, after all. Your yoga mat may be more than one source of solace.
Most importantly, remember to breathe. We pay taxes to live in a society where our professional pursuits can be supported, where we can count on an educated public, where our health care is a right, where our children can thrive. Our individual prosperity increases when our community’s prosperity grows.
For more information on business and hobby expenses, check out IRS Publication 535.