The Social Security system is in place to help us through difficult times. Unfortunately, there are some instances in which the system makes our lives even more difficult than they need to be. The day I received the denial letter for my claim, I wasn't sure what I was going to do. After talking with a few friends, I contacted a lawyer. That was the best decision I had ever made. Even with the professional assistance, getting the denial overturned and getting the money that I was owed took several months. I have kept a clear journal of my experience and loaded it with information that can help others get through what can be an impossible time.
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Social security denial - a journal of assistance
Taxes And Your Hobby Business: What You Need To Know
Alexis Garcia
If you have a hobby you enjoy and you think it could be lucrative as a business, you need to do some research. While hobbies are fun and you may be passionate about it, you have to be careful when it comes to taxes.
Do you have a hobby farm you want to turn into a business? Do you want to sell your woodwork or crafts online? These ideas can make you money once you become established, but you need to understand the implications on your taxes. Here are some tax questions to consider before you turn your hobby into a business
Why Do Taxes Matter for a Hobby-Based Business?
No matter the genesis of your business, whether you are turning a hobby into a business or you are buying a franchise, you have to set yourself up to pay your taxes properly. You cannot simply pocket all the money you make, even if you work on an all-cash basis. This can lead to major problems for you and the Internal Revenue Service.
How Do You Turn a Hobby Into a Business?
Once you decide you want to move forward with a new business, you need to begin by setting up a good system for all your documentation. If you work as a sole proprietor, you do not need to file anything to establish yourself. However, you may want to set yourself up as an LLC for the asset protection benefits. No matter which option you choose, you need to meet with your tax attorney and accountant to file the necessary paperwork that shows you are operating as a business. Choose a local attorney, such as Harris Shelton Hanover Walsh PLLC, to help you.
What Does the IRS Check For?
The IRS will run tests to determine if your claimed business is an actual business or still a hobby. The test is simply whether or not your business made a profit. Typically, the IRS will expect you to make a profit within a certain amount of time during its operation. You can also pass the test by creating a business credit or bank account for your business.
It is easier than ever to convert a hobby into a business, but you need to do so thoughtfully. If you have any questions about taxes and a potential business, be sure to consult with your attorney. You do not want to make a mistake with your tax setup, or you could ultimately pay the price at tax time.
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