No, tax reform makes deducting hobby expenses nearly impossible.
Is This A Hobby Or A Business?
It’s important to know if the IRS classifies your activity as a hobby or a business. If your hobby is now a full-fledged business, you should take valuable business deductions.
Generally, the definition of business is a venture whose primary purpose is to make a profit. If your motive is not primarily for profit but rather, for fun, sport or recreation, it is considered a hobby.
If the IRS classifies it as a hobby, you can’t get the same set of deductions as a business. Still, you can often deduct some hobby expenses.
Hobby Expense Deduction In The Past
Under the prior tax law, you could potentially deduct hobby expenses up to the amount your hobby made money. You’d treat those expenses as a miscellaneous itemized deduction that you could only deduct if it exceeded 2 percent of your AGI.
Tax reform removed this deduction.
MileIQ’s blog does not constitute professional tax advice. You should contact your own tax professional to discuss your situation.