https://youtu.be/NB6BFiirn_g
Are you a creative soul who has turned your passion into a business? Or perhaps you're an entrepreneur, teetering on the edge of turning your hobby into a full-blown venture. Either way, you've got to address the elephant in the room: Is this a hobby or a business?
Now, before you start throwing paintbrushes or pottery wheels at me, let's get one thing clear. There's absolutely nothing wrong with having a hobby. Hobbies are great! They provide an escape from the daily grind, allow us to express our creativity, and sometimes, they even give us an excuse to avoid doing the dishes.
However, when it comes to the IRS, they don't exactly share our love for hobbies. In fact, they might not be as enthusiastic about your art studio or baking classes if they suspect it's more of a pastime than a profitable venture. And believe me, you don't want to be on the wrong side of the IRS's hobby vs. business debate.
So, let's delve into this hot topic and help you determine whether your venture leans more towards a hobby or a business.
According to the IRS, there's a checklist to differentiate between the two. They look at factors such as recreational intent, lack of profit motive, irregular activity, personal enjoyment, and lack of formal organization. On the other hand, for businesses, the IRS checks for profit motive, regular and continuous activity, expertise, investment of time and effort, and dependence on income.
Now, I know what you're thinking. "But Jasper, my cake decorating brings me immense joy AND it pays my bills. How can I prove it's a business and not just a fun pastime?" Fear not, my entrepreneurial friend! Evidence such as a business plan, expert guidance, and consistent record-keeping can demonstrate your intent to operate a business.
And that's where PYOP accounting steps in. As a full-service CPA and business growth expert, we offer financial management with ease and bake smooth financial systems into the DNA of your business. Our goal is to support your retail and event-driven studio and provide a clear path to profitability. After all, your business's job is to support you, just as you support it.
So, whether you're a studio owner, an entrepreneur, or heading a women-owned company, if you need a dynamic partner in building a real business, we're here to help. Because life is too short for low returns on big energy.
Ready to make your studio a main source of income and a worthy investment? Then don't miss out on the rest of this article. It's time to turn your hobby into a thriving, legitimate business that can support a retirement plan and let you live life on your own terms.
Intrigued? Good. Keep reading, and let's turn your passion into profits!
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Donna Bordeaux, CPA with PYOPAccounting.com
Creativity and CPAs don’t generally go together. Most people think of CPAs as nerdy accountants who can’t talk with people. Well, it’s time to break that stereotype. Lively, friendly, and knowledgeable can be a part of your relationship with your CPA, as demonstrated by Donna and Chad Bordeaux. They have over 50 years of combined experience as entrepreneurial CPAs. They’ve owned businesses and helped business owners exceed their wildest dreams. They have been able to help businesses earn many times more profit than the average business in the same industry and are passionate about helping industries that help families build great memories.
