Making Hobbies Tax Deductible
One of the things I love to do is attend sporting events, charities, and other gatherings at my alma mater. These events are excellent ways to reconnect with friends, support my school, and see how things have changed around campus. Plus I love my football. Who doesn't?
The problem I run into is travel costs. I unfortunately do not live in the same city as the college I attended, so I incur costs of gas, wear on my car, restaurants, and lodging. I am usually a pretty frugal person, so added together these costs make up a big portion of my leisure spending. The question that I then asked myself is - how do I get these expenses to be tax deductible?
I did some searching and found an individual contractor position in the city of my alma mater. It does not require a substantial amount of time, and I can schedule the job as I please. It interferes a little with my weekend, but I can schedule everthing around planned events. While not perfect, this job was the answer to my problem. Now travel costs are related to a business expense. I could not perform the job without traveling to that city and staying the weekend. I pay for the entire trip, make most of the weekend tax deductible, and still make a profit. Not bad right?
I am not advocating that everyone get an extra job, but I do believe that everyone should find a way to make their hobbies (at least one of them) tax deductible. Hobbies are some of the most enjoyable and time consuming aspects of many people's lives. They often cost a good amount of money, and they can lead to arguments in the family if they cause financial constraints.
There are many ways to make hobbies tax deductible. You could do what I did and find a contracting job to pay for travel, sightseeing, or other adventures. You could also form a business around your hobby. According to IRS rules, this business does not even require you to make a profit as long as you can demonstrate legitimate profit motive. The legalities behind that are tricky, so consult an attorney if you have questions there. It is easier to demonstrate that your hobby is a business if it makes a profit. Say you love knitting - open a yarn shop. If you enjoy gardening, begin a mini farmer's market on select weekends. If you are an avid hunter, maybe you can rent your time as a guide or teaching others to skin a deer. By doing this, your hobby expenses become a business expense and can be tax deductible.
There is probably a way to make every hobby tax deductible so that you can spend more time enjoying that hobby and/or less time wondering how you are going to pay for that hobby. The more ways you can save money, the easier it is to become wealthy and financially independent without sacrificing your enjoyment of life.