Can I deduct expenses for a self-published comic book as a 'hobby' on my taxes?

Question

I self-publish a comic book online for fun, that I do sell, but the profits from sales are extremely minimal (under $50 for '06). Considering preparation and printing costs well exceeded any profits I made, could the expenses of printing and supplies be deducted as 'hobby' expenses when filing my federal return?

Also, I've spent money on supplies like paper, ink, brushes, etc. Could this also be deducted as part of the hobby?

Thanks.

Answer 1

Sure, you can deduct the expenses incurred for self-publishing a comic book online, for fun.....ONLY if you claim income from it. You see, on a "hobbie" you may only claim deductible expense up to the $$ amount of your hobby income.

It is therefore a wash...even steven....tit for tat...mano o mano. Why bother?

----------------Warning--------warning----------warning---------
Be very careful about filing a Schedule C, (business loss) for a hobby.

If you do, you must prove, to an IRS auditor, that all the income and expenses you claimed are legitimate. At an audit, if you are unable to prove this a legitimate business (which it is not) you will be held accountable for penalties, interest and reimbursement of money to the Internal Revenue Service.

In my opinion, be an ethical individual. By filing this hobbie as a Sch. C (business with a loss), you may owe the IRS less tax initially, but you'll pay the tax preparer a few hundred more for the forms and leave yourself open for an IRS audit.

It is not worth the trouble.
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I do not mean any disrespect to the man who answered this ? before me, but please do not file illegal business'. Watch out for preparers with his way of thinking.

There are ethical tax preparers out there who will work every legal angle for their tax clients and stand behind their work 100%...(like an Enrolled Agent).

Others do your taxes just for the quick $$$ and you'll never find them again. Guess who is caught holding the bag....YOU...THE TAXPAYER. As soon as you sign the tax return...you are agreeing that all of the information in it is true and correct. Be Careful!

Answer 2

I would not ever again use the term hobby when referring to your comic book venture. Going forward you must think of it like your own personal business and YES you can deduct all your expenses. You will do a schedule C. Deduct everything you can...from your personal computer, internet costs, printing supplies along with mileage from your trips to Walmart or where ever. Your desk & chair are even deductible. You made $50 last year, but you did make some money.

Answer 3

You cannot deduct expenses for a hobby. If you want to call this activity a "business" you could show both the sales proceeds and the expenses and report the net loss for 2 or 3 years (check the rules at irs.gov). After that period of time you can no longer get advantage of losses--you have to have a net income or otherwise eat the losses.

Answer 4

It's obvious I do. I mean, I TALK to you about these things! I have like a bunch of anime crushes. I've read over 313 mangas. I can name nearly all the OP and ED of my favorite animes. I can give you a list of my favorite Visual Kei Band, Anime OP and ED, Vocaloid songs. I am... AN OTAKU! HECK YEAH!

Answer 5

Hobbies are neither taxed nor deductible. Businesses are.

Answer 6

The question is not whether it is or isn't. The question is why would you intentionally throw up a red flag to the IRS that will certainly cost you a lot of time and effort to explain should they question it. Best to let this one go.