Don't forget to deduct your reef hobby!

justinl

justinl

Member
Just a friendly reminder to everyone during tax season- your expenditures for your reef hobby are deductable! So, don't forget to do it if you qualify- it might get you a few extra bucks back on your refund to put towards more reef stuff! :p
 
tangman99

tangman99

Active Member

Originally posted by jamesurq
pretty sure unless you live in your tank and can declare it a second home, this guy is kidding.:)
I don't know. I know you can duduct certain hobbies like drag racing. There may be some way to do it, but I don't know how.
Post the details dude ... :confused:
 
rook

rook

Member
If you run a business out of your home, possibly a home business deduction. But, it is a very difficult deduction to qualify for.
 
justinl

justinl

Member
Actually, I'm not kidding. The IRS allows you to deduct a certain amount for hobbies. The expenses for your hobby must come to more than 2 percent of your adjusted gross income before you can deduct them.
Since a lot of people on the board sell coral frags and trade them, you can offset the taxes you must pay as a result of the sale of your coral frags (if you report that to uncle sam ;) ) by deducting some of your expenses for the hobby- i.e. shipping the frag, reef lighting, etc.. The deduction however cannot exceed the income you may have gotten from your hobby.
It's a bit complicated, and more than likely you won't see any increase in your refund, but there's a chance it just might help you and you might want to play with it on your taxes just to see.
Maybe there's a cpa on here that can provide more insight, or prove me wrong.
 
sterling

sterling

Member
Since my tanks are in the office of my boarding kennel, mine are almost totally deductible. I just found this out this year.
 
cobra2806

cobra2806

Member
For those of you who sell frags and such, that is considered income just like a business selling something. If the IRS catches wind of this income they will want to tax it. However, since this is a hobby and your expenses are greater then your income (unless you are running a small business) you would need to supply the IRS with a letter stating its a hobby and include your expenses and they will leave you alone. As far as deducting I think JustinL is correct, you can only deduct up to the amount you are including as income from this hobby. For most of us that will be zero therefore we can't deduct anything. I'll try to look into this to verify if anyone is really interested.
 
wrassecal

wrassecal

Active Member
I don't know about this hobby part, but I have my own small business and I'm deducting mine through depreciation (office equipment/furniture) and then of course there are the misc. office expenses for upkeep services, etc.:rolleyes:
 
reefaddicted

reefaddicted

Member
You absolutely CAN NOT deduct the expense from your hobbies (any hobby).
You are only allowed to deduct the amount you spent on your hobby up to the value of the income you reported that was generated from your hobby!!!!!!!!!!!!
For example if you were selling Frags out of your household...and you reported a gross income from these sales of $1000...then you could also deduct the amount you spent on the hobby UP TO $1000.
The link posted above also states this very clearly.
 
S

simm

Guest

Originally posted by reefaddicted
The link posted above also states this very clearly.
yea I read that. My misunderstanding.
 
justinl

justinl

Member
I thought that I had said that previously about the profit vs expense- "The deduction however cannot exceed the income you may have gotten from your hobby. " but still, it's a deduction, and that's money back for some people if it works for them.
I have a home office also, and I bought a tank specifically to go in my office. I'm not sure however if one can deduct this as office furniture/equipment. Might be a legitimate way to get around the hobby limitation, but I wouldn't bet on it.
Anyway, I posted this thread just to let people know that while there are rules, deductions from the reefkeeping hobby can be made. Use the info as you will. :)
 
rook

rook

Member
JustinL
You might possibly be able to deduct your home office tank, if, your home office meets the stringent criteria for a home office, and there is a legitimate business purpose for having the tank in there.
For example, a Drs Office is normally allowed to deduct business expenses for a fish tank because there is a demonstrated benefit to the patients of having the tank.
A prewarning. If you or anyone attempts a home office deduction, follow the criteria under the rules closely. The IRS attacks home office deductions vigorously due to past abuse of it.
 
tangman99

tangman99

Active Member
Kind of off subject, but I elected through advice from my accountant not to mess with the home office deduction at all. I am an independent consultant and have my own company but my company address is my home because I don't need a business location. The red flags a home office deduction throws up is not worth the few hundred dollars it will save me in taxes.
 
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