We’ve been using our Money Monday to talk about saving more of our hard-earned money for ourselves instead of paying more than is due to the tax man. Here’s another way to save on taxes:
Tax Free Expenses
Take a hobby and turn it into a small business so that your pleasure becomes a tax deduction. Certain rules apply, but if you are entrepreneurial, there is no reason that your hobby can’t be a business, too.
If your hobby produces taxable income, then you can also deduct the reasonable business expenses.
This is an especially good way for a work-at-home mom to benefit her family financially. In addition to earning extra money, you can use the expenses associated with your business as a tax write-off. The key is to not let your expenses outweigh your income! Have a plan. Consider a field!
Are you a musician? Make a CD, travel to music fairs to market your product, and sing a song when you deposit those proceeds, and deduct your expenses.
Like to craft? Launch an Etsy account to sell your one-of-a-kind creations, and before you know it, you’ll have to invest in some new tools and equipment and supplies. Be sure to keep the receipts to offset your income!
Have a talent? Give lessons or use your professional skills, and maybe you’ll be able to afford that new piano, or studio, or that new camera or photography equipment. Be sure to expense that continuing education or conference you’ll need to attend to keep up with the latest trends.
Do your research on the tax laws, and get creative so that you can turn your interests and hobbies into a legitimate business. Then you’ll truly never work a day in your life, if your hobby becomes your job!!
Shari
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