Tax Tips about Hobbies that Earn Income

Do you have a particular hobby that is also a source of income? If so, you must report any income you get from your hobby on your tax return.  How you report the income is different than how you report income from a business. For example, there are special rules and limits for deductions you can claim from a hobby.

Here are four tax tips you should know:

1. Business versus Hobby.  A key feature of a business is that you do the activity to make a profit. This differs from a hobby that you may do for sport or recreation. There are nine factors to consider when you determine if you do the activity to make a profit.  Make sure you base the decision on all the facts and circumstances of your situation.
2. Allowable Hobby Deductions.  You may be able to deduct ordinary and necessary hobby expenses. An ordinary expense is one that is common and accepted for the activity. A necessary expense is one that is helpful or appropriate.
3. Limits on Expenses.  As a general rule, you can only deduct your hobby expenses up to the amount of your hobby income. If your expenses are more than your income, you have a loss from the activity. You can't deduct that loss from your other income.
4. How to Deduct Expenses. You must itemize deductions on your tax return in order to deduct hobby expenses. Your costs may fall into three types of expenses. Special rules apply to each type. 

As always it's a good idea to consult with your tax adviser regarding these matters. Call us if you need help.

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Reminder Regarding Extensions

If you requested an extension to file your 2014 taxes, the deadline is October 15th. However, you do not have to wait until then to complete your filing if you have all of your documentation ready- especially if you have a refund coming.

If you're not ready, be sure to get all of your documentation in order now so that you don't miss the deadline. Otherwise you risk getting a late filing penalty and interest on payments due.

For military members serving in a combat zone, you have 180 days after you leave the combat zone to file returns and remit any tax payment that is due.

Let us know if we can help.

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Webinar Series offered on ACA Provisions for Employers and Coverage Providers

The IRS is presenting three different webinars regarding the Affordable Care Act provisions for employers and health care coverage providers.

Please note they are all schedule for Eastern  Daylight Time.

Employer Shared Responsibility and Information Reporting 
Learn about the ACA's employer shared responsibility provisions and information reporting requirements for employers and providers of minimum essential coverage.

• July 28, 11 a.m. - 12:30 p.m.- Click here to register
• Aug. 20, 1 - 2:30 p.m.- Click here to register
• Sept. 16, 1:30 - 3 p.m.- Click here to register

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers
Learn about employer-sponsored health coverage information reporting requirements for applicable large employers, including who is required to report, what information the law requires you to report, and how to complete the required forms.

• July 29, 1 - 2 p.m.- Click here to register
• Aug. 11, 1 - 2 p.m.- Click here to register
• Sept. 10, 11 a.m. - 12 p.m.- Click here to register

Information Reporting Requirements for Providers of Minimal Essential Coverage
Learn about the information reporting requirements for providers of minimum essential coverage, including employers that provide self-insured coverage. Learn who is required to report, what information the law requires you to report, and how to complete the required forms.

• July 30, 1-2 p.m.- Click here to register
• Aug. 26, 1 - 2 p.m.- Click here to register
• Sept. 22, 1 - 2 p.m.- Click here to register

For more information about the Affordable Care Act and tax provisions for employers and health coverage providers, visit http://www.irs.gov/Affordable-Care-Act.

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Small Businesses Can Get IRS Penalty Relief for Unfiled Retirement Plan Returns

Small Businesses Can Get IRS Penalty Relief for Unfiled Retirement Plan Returns

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Tax Tips Regarding Vacation Home Rentals

If you rent a home to others, you usually must report the rental income on your tax return. However, you may not have to report the rent you get if the rental period is short and you also use the property as your home.

In most cases, you can deduct your rental expenses. When you also use the rental as your home, your deduction may be limited. Here are some basic tax tips that you should know if you rent out a vacation home:

• Vacation Home.  A vacation home can be a house, apartment, condominium, mobile home, boat or similar property. 
• Schedule E.  You usually report rental income and rental expenses on Schedule E, Supplemental Income and Loss. Your rental income may also be subject to Net Investment Income Tax. 
• Used as a Home.  If the property is "used as a home", your rental expenses can't be more than the rent you received. For more about these rules see Publication 527, Residential Rental Property (Including Rental of Vacation Homes). 
• Divide Expenses.  If you personally use your property and also rent it to others, special rules apply. You must divide your expenses between the rental use and the personal use. To figure how to divide your costs, you must compare the number of days for each type of use with the total days of use. 
• Personal Use.  Personal use may include use by your family. It may also include use by any other property owners or their family. Use by anyone who pays less than a fair rental price is also personal use. 
• Schedule A.  Report deductible expenses for personal use on Schedule A, Itemized Deductions. These may include costs such as mortgage interest, property taxes and casualty losses. 
• Rented Less than 15 Days.  If the property is "used as a home" and you rent it out for fewer than 15 days per year, you do not have to report the rental income. In this case you deduct your qualified expenses on schedule A. 

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz