Oakland Tax Preparation Company, Liberty Tax Service Offers Tips to Differentiate Between A Hobby Enthusiast and Small-Business Owner
Company Added
Company Removed
Apply to Request List

Oakland Tax Preparation Company, Liberty Tax Service Offers Tips to Differentiate Between A Hobby Enthusiast and Small-Business Owner

This tax season, Liberty Tax Service in Oakland explains the difference between a hobby enthusiast and a small-business owner.

Oakland, CA (PRWEB) January 10, 2012 - Many Americans with full-time jobs engage in creative pursuits that may be lucrative financially or may turn a profit in future years. How does making jewelry or crafts in spare time affect a total tax filing picture? Before preparing taxes this year, consider Oakland tax preparation company, Liberty Tax Service’s tips to understand the difference between a hobby enthusiast and a small-business owner.

When it comes to the IRS, it’s all about intent to be profitable and actually making money. The IRS criteria for determining if an activity is for-profit includes three considerations:

  1. Time and effort to make the activity profitable
  2. Dependency on generated income
  3. Success in the venture

Hobby income is best defined as a not-for-profit income, and losses cannot offset other sources of income. Some expense items may be claimed as miscellaneous expenses. Serious and prosperous artisans making money can offset expenses and generally file a Schedule C or Schedule C-EZ to declare gross receipts and claim expenses. Allowable tax deductible expenses could include the costs of materials, entry fees for shows, classes or instruction, advertising, mileage, and possibly a deduction for a home office or studio.

Keeping thorough records is important for those with hobbies that may become businesses. Those starting an activity that may become profitable can elect to file Form 5213, Election to Postpone Determination as to Whether the Presumption Applies That an Activity is Engaged in for Profit. This form delays the determination of profitability for five to seven years.

“Self-employment and filing a Schedule C is a subject covered in Liberty’s tax courses,” Malkeet Singh of Liberty Tax Service said.

Enrollment is underway for basic tax classes at Liberty Tax locations across the nation. Instructors cover all schedules, credits and forms that can be filed with an individual tax return.

For more information on Liberty Tax Service in Oakland, call 510-239-5284, view the service on the web at http://www.libertytax.com or visit 3207 Grand Ave. in Oakland.

About Liberty Tax Service

Liberty Tax Service is the fastest growing retail tax preparation company in the industry’s history. Founded in 1997 by CEO John T. Hewitt, a pioneer in the tax industry, Liberty Tax Service has prepared over 8,000,000 individual income tax returns. With 42 years of industry experience, Hewitt stands as the most experienced CEO in the tax preparation business.

Liberty Tax Service is the only tax franchise on the Forbes “Top 20 Franchises to Start,” and ranks number one of the tax franchises on the Entrepreneur “Franchise 500.” Each office provides computerized income tax preparation, electronic filing, and online filing through eSmart Tax. Oakland’s tax school at Liberty Tax Service also provides tax planning and tax courses.


Malkeet Singh
Liberty Tax Service
(510) 239-5284



comments powered by Disqus

Franchise News Room »

News By Industry »

Featured Opportunities

Sky Zone
Sky Zone created, built and franchises the first of its kind wall-to-wall trampoline playing courts with unlimited purposes and endless possibilities.
Every business needs signs. And there's no better way to tap into this lucrative $8 billion-plus market than with a SIGNARAMA franchise.
True REST Float Spa
Be on the ground floor of taking this movement mainstream by joining the established market leader today!
Applebee's Neighborhood Grill + Bar
If you're interested in potential franchising opportunities domestically, we welcome the opportunity to speak with you.
Huddle House
Everyone knows a House is a good investment! Huddle House is a full service restaurant, serving delicious meals, cooked to order...
Share This Page

Subscribe to Our Newsletters

A Franchise Update Media Production
Franchise Update Media
P.O. Box 20547
San Jose, CA 95160
PH. (408) 402-5681
In Loving Memory Of Timothy Gardner (1987-2014)

Copyright © 2001 - 2019.
All Rights Reserved.