Klarinet Archive - Posting 000535.txt from 1998/02

From: "Scott Morrow" <sdm@-----.edu>
Subj: Re: It's tax time
Date: Thu, 12 Feb 1998 08:34:59 -0500

-----Original Message-----
From: Tony Roberts <troberts@-----.net>
Date: Wednesday, February 11, 1998 10:05 AM
Subject: Re: It's tax time

>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.

-------------> At least as far as writers areconcerned, I think the "3 out
of 5 profit years" part was relaxed a couple of years ago; you just have to
show that you are trying to make a profit. My wife and I file a schedule C
to encompass ALL of our income/expenses in the arts.
>
>Look for some information in tax publications on Sole Proprietorship. That
>will point you in the right direction.
>
>Tony