Dave,
Actually, the biggest difference between a 'business' and a 'hobby' are related to what you can DEDUCT, not what you PAY.
They'll allow you to 'break even' with a hobby, but not use losses there to offset other income. For a business, you can use losses to offset other income, but only for so long....
The concept is that the start up costs are usually high for any given enterprise, thus losses are expected until that is overcome.
I know of no 'table' or 'rule of thumb' that attaches a dollar amount to whether or not your enterprise is a business or a hobby. What I learned over the years is that if you take in money for anything, you have to report it as income. It's how that amount you take in compares to the expenses you deduct that determines this. Basically, if you make a 'profit' you have to report it and pay taxes on it.
If you want to keep yoiurself out of the clutches of the evil IRS, find a good tax expert and be SURE you know what you are doing before you do it. Yes, you'll have to pay for this advice, but it IS deductable as a necessary business expense .
Buddy
Last edited by Buddy Sanders; 02-20-2011 at 03:16 PM.
It Just Doesn't Matter....