Good Morning Gentle Readers,
Frequent Gentle Reader NoStar wants to deduct his wine purchases because he writes wine reviews on occasion. That can be done under certain circumstances as TWC outlines below. While specific to writing about wine, these rules are broadly applicable to many other enterprises that the IRS might otherwise consider hobby businesses.
The cost of the wine is a deductible business expense if your writing is done with a bona fide expectation of getting paid. You don't have to get paid for each and every article you write, but you have to consistently attempt to earn income by submitting some of your work to organizations that will pay you if they accept your writing for publication.
As a broad rule you may deduct hobby business expenses up to the amount of income the hobby generates if you are not engaged in business with the expectation of making a profit.
Expectation of making a profit. That's the key and a fine line that's open to interpretation. But TWC can guarantee that showing consistent losses selling Amway while you feed your washing machine's detergent dispenser for free isn't going to fly in an audit nor will those losses be sustained in tax court.
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