On Wednesday, 6 March 2002 19:59:18 UTC+2, RMartino wrote:
Although fairly new to woodworking I have been turning out some fine
birdhouses, andirondack chairs, and bookcases and have made several of each
that I have sold to friends and acquaintances. I have the thought (may not be
a cerebral one) that I should declare this a home business to at least write
off some of my tool expenses. Any thoughts, pitfalls, IRS implications?

Regards,

Bob

Bob, and everyone else considering starting a business out of a hobby at home, you must take into consideration that the IRS takes business vs hobby very seriously, as the others pointed out as well. In order to understand what "tests" the IRS performs to differentiate a business from a hobby this article will come in handy: http://www.prestinaegele.com/busines...ers-to-the-irs
When it comes to claiming business home deductions, you might consider the new safe harbor method the IRS introduced. Of course, this is not effective for 2012 tax year returns being filed during the current 2013 filing season, but everyone can take it into consideration when tax planning this year. There are some rules and limitations to this method, this article explains it pretty well: http://www.prestinaegele.com/irs-int...fice-deduction
Hope this helps and best of luck with your businesses everyone!
Andrew Wayne