WAH vs lucrative hobby

iVillage Member
Registered: 04-22-2005
WAH vs lucrative hobby
27
Mon, 03-23-2009 - 3:28pm

At what point (if any) does one make the distinction between WAH and having a hobby that happens to bring in a little bit of cash? I can't imagine paying any real bills by making hair bows.

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iVillage Member
Registered: 02-04-2009
Mon, 03-23-2009 - 3:32pm
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Kitty

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iVillage Member
Registered: 02-22-2007
Mon, 03-23-2009 - 3:32pm

For me, it was the point where I received an actual contract for the work I did.

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Why hide your light under a bushel of bears, I ask you?

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Why hide your light under a bushel of bears, I ask you?
iVillage Member
Registered: 04-22-2005
Mon, 03-23-2009 - 3:43pm
That's pretty sweet. I know about transcription and home daycare, but beyond that it seems that "real" WAH jobs are few and far between. There is direct sales (but you have to, you know, LEAVE THE HOUSE to attend the parties), and I've heard people suggest stuff like making gift baskets. Gift baskets? Seriously? Do people actually buy that many gift baskets? Things like making bows and gift baskets and stuff like that strike me more as hobbies.
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Edited 3/23/2009 3:56 pm ET by finally.me




iVillage Member
Registered: 02-05-2009
Mon, 03-23-2009 - 3:56pm
I'd think that one very defendable, objective dividing line would be the one the IRS imposes. When the income from the "hobby" becomes such that income should be reported to the IRS, it's no longer a hobby, but a WAH job.
iVillage Member
Registered: 04-22-2005
Mon, 03-23-2009 - 3:58pm
That's a good defining point. How much does one have to make for it to be taxable?
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iVillage Member
Registered: 01-09-2009
Mon, 03-23-2009 - 4:02pm

I've also wondered what is *lucrative*.

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Ducky

iVillage Member
Registered: 10-07-2004
Mon, 03-23-2009 - 4:23pm

I suppose the distinction is profit, or income based on your time.

I've seen a lot of crafts that are priced just barely over the cost of supplies. It's really difficult to compete with retail. Check out the huge price range on sites like etsy.com. Some seem to reflect labor in the price of their items, while others just seem to want to work for free to feed their craft habit. I am on a mission to crochet each of the elder women in my family an afghan this year as gifts for holidays, birthdays, etc., and sometimes I wonder why I bother when I could just order a few of those $30-$40 pieces and call it done! I spend that much for one afghan buying the cheapest no-frills yarn from discount craft stores, usually by painstakingly making a daily stop to purchase one skein at a time with a 50% off coupon!

iVillage Member
Registered: 02-22-2007
Mon, 03-23-2009 - 4:42pm
The WAH work I do now is not making stuff, but I have made decent money selling stuff I made too. I wouldn't do it full time, but it was enough to supplement my severence during a time of unemployment.

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Why hide your light under a bushel of bears, I ask you?

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Why hide your light under a bushel of bears, I ask you?
iVillage Member
Registered: 03-27-2003
Mon, 03-23-2009 - 4:50pm
I think the IRS is who gets to make that distinction. I haven't researched at what point the ebay (or whatever) income becomes reportable, but I'm sure there's a hard number that defines that point.
iVillage Member
Registered: 02-05-2009
Mon, 03-23-2009 - 5:06pm

I belive that, technically, there is no minimum at which IRS deems profit non-taxable. All profit is taxable. If you make a hair bow for the cost of $4 and sell it for $6, the $2 profit is reportable and taxable.


However, it is unlikely that the IRS is going to come after you for selling $20 bows at a $2 profit. ($40 total).


"hobby-ers" should also keep in mind that it isn't the "income" that's taxable, but the profits, which means all expenses are deductible.


And, things you already own that you sell? Like the baby clothes your daughter wore 10 years ago, or the pottery that's been cluttering up your dresser for 3

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