How To Avoid An Audit By The IRS Part Two
Another thing that makes the Internal Revenue Service wary is hobby losses. Last year the Internal Revenue Service handed its agents a manual about how to find hobby losses, which is when tax payers underwrite activities they enjoy – like soccer – by labeling them as businesses and claiming a loss on a Schedule C under the guise of self employment. Remember that any Schedule C that lists a loss will be under scrutiny, especially if your new business has something to do with anything enjoyable or fun.