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Hobby or Lifestyle?

This thought reemerged again last night after going to my tax accountant. Upon being told the obscene amount of $ that the govt. is going to releive me of my wife said I should find another hobby which is work related (and thus deductable). This triggered a thought. In the past I've seen many posts about this "hobby" and it has always seemed odd to me to call it a hobby. I've never thought of this as a hobby. I started buying records at about the age of 9-10 (1960-61). I had a cheap "record player" back then and since that time I can never remember a day without a way to play my music or many days that I didn't play some music. My systems got better through the years and I now have the best system that I have ever owned. In my younger nomadic days, I can remember moving with only my clothes, drums and stereo. And if I had to move today and could only take three items, the list would be the same. To me "stereo" is not a luxury item. It is as necessary as any appliance in the house. It's not a hobby but a lifestyle. Anyone else feel this way?
128x128artemus_5
kthomas
911 posts
 
If you're looking for a tax writeoff, it doesn't matter if it's a hobby or a lifestyle, neither is deductible. You could start a business of equipment "reselling" and, as long as you showed a profit some % of years, could keep a lot of gear going through the system. Or, you could start a business that, through some convuluted logic, "required" you to have an audio system. I can't think of what that might be, but a small company can writeoff a modest amount of depreciated expense in a single year (Section 179) for justified expenses. -Kirk
sugarbrie
3,854 posts
 
Section 179 is currently $24,000 and is limited to income; it cannot create a loss. You could also have a business that uses the audio equipment, instead of buying and selling. Start a part time business recording local concerts and burn CDs. (Or something similar.) You would probably get to deduct a chunk of your computer related equipment as well. You do have to demonstrate a real profit motive, for it not to be a considered a hobby by IRS. If a "hobby" does create some income, the expenses are limited to income. You cannot deduct any losses.

Good Luck.... Sugarbrie CPA
fatparrot
1,314 posts
 
If the government takes such a sum of money from us each year, can you just imagine the absolute killer sound systems that our "Uncle Sammy" must be able to afford? Everyone down to the Washington Mall for an audio shoot out! Happy Tunes!
artemus_5's avatar
artemus_5 OP
412 posts
 
My main point was not the tax issue but that I considered my music and its reproduction a lifestyle and not a hobby. I have started to post this before but did not. The tax issue and conversation that followed just brought it back to mind. I did consider starting a thread about the fact that we as Americans work from 1/1 to about 5/20 just to pay our tax burden for the year. This includes Fed, State, property, sales etc, but that is very close to 50%. The Revolutionary War was fought over far less.
bwyoung
140 posts
 
Mine is a hobby which I enjoy nearly everyday and is very much a part of my lifestyle.
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