Hobby Tax deduction

[SILVER2000SVT]

Question for any of you hard core guys. Do any of you here treat the mods on your truck like a hobby and claim the deduction on your Federal Income taxes?

According to the rule you can deduct the amount over 2% of your adjusted gross income that you spend on hobbies.

For example if your AGI is 40,000 and you have expenses of $2000. (2% = $800) then you can deduct $1200.00

[tiffo60]

i didnt know that but if so i can deduct a big chunk for what i put into it last year:D

[wesman]

Never even heard of that.....dayummm...left some money on the table the last couple of years.

--wes

[StormShadow]

I talked to my tax person tonight and they said that is just for earnings. Not how much you spent on your hobby.

[wesman]

I talked to my tax person tonight and they said that is just for earnings. Not how much you spent on your hobby.

Here we go:

If you lose money pursuing a hobby, you cannot deduct your hobby loss from your other income on your tax return, but you can deduct your expenses up to the amount of your hobby income on your tax return. A hobby loss is a miscellaneous tax deduction on your tax return, though, and limited by the 2% of AGI threshold.

[Wht95Lightning]

A hobby loss is a miscellaneous tax deduction on your tax return, though, and limited by the 2% of AGI threshold.

So 2% of my AGI can be written off by calling it a hobby loss? :confused:

[SILVER2000SVT]

Here we go:

If you lose money pursuing a hobby, you cannot deduct your hobby loss from your other income on your tax return, but you can deduct your expenses up to the amount of your hobby income on your tax return. A hobby loss is a miscellaneous tax deduction on your tax return, though, and limited by the 2% of AGI threshold.

I found this yesterday too. Basically says you can claim hobby expenses only up to what you claim for hobby income, less 2%. Bottom line you would never come out ahead because you have to claim hobby income as well and would always have to give up that 2% on the expenses. Oh well thought it was interesting anyway.

[Stinkbug]

So, I can do this with my Cross Country motocross? I earned 1600 in winnings from Kaw last year and spent alot more than that in racing cost. Would this be a good example?

[wesman]

So, I can do this with my Cross Country motocross? I earned 1600 in winnings from Kaw last year and spent alot more than that in racing cost. Would this be a good example?

Yes, this sounds like it might qualify, but it seems that it would work only if you report the winnings at income. I'd ask online at some of the tax websites, or call and ask an accountant etc.

--wes

[Stinkbug]

I will definatly ask and I get a 1099 from Kawasaki.

Thanks for the info.