Klarinet Archive - Posting 000514.txt from 1998/02

From: Tony Roberts <troberts@-----.net>
Subj: Re: It's tax time
Date: Wed, 11 Feb 1998 09:45:15 -0500

At 08:05 AM 2/11/98 EST, Gary L Smith said ...
>But my major reason for responding is to mention one thing that kind of
>reeks: those of us who play and give lessons for $, but do not make our
>living at it, find this whole question moot - the IRS does not allow
>*any* deductions. At least, a friend who makes *his* living advising
>people on tax issues told me this - in such cases it's considered a
>hobby.

Gary,

I think you might not have the whole picture. My understanding is that in
the case of a hobby you are able to deduct expenses only to the extent that
they are offset by income and only if you itemize expenses.

However, since you give lessons, you certainly could establish a Schedule C
business and take further deductions. Your enterprise qualifies as a
business if you *intend* to make a profit and you actually do so in (I
think) three of five years. If you *intend* to make a profit, then you're
eligible for the whole range of deductions available on schedule C.

Look for some information in tax publications on Sole Proprietorship. That
will point you in the right direction.

Tony