Can I claim my hobby expenses as business tax deductions? (First-time filer Question!)

Thanks for the detailed explanation! So basically, unless I can prove these hobbies directly contribute to my marketing business's income, they're probably not deductible? What if I occasionally use my photography from gardening or motorcycles in social media posts for clients? Does partial business use make any portion deductible?

You're exactly right about needing to prove these expenses directly contribute to your business income. If you genuinely use photography from your gardening or motorcycles for client work, you might be able to deduct a portion of those expenses - but you'd need to track and document the percentage of business use versus personal use very carefully. For mixed-use items, you can only deduct the business percentage. For example, if you use your digital art setup 30% for client work and 70% for personal projects, you could potentially deduct 30% of those costs. Just make sure you keep excellent records showing how these expenses connect to your marketing services and have documentation ready in case of an audit.

How exactly does it work? Do they connect you with a real tax professional or is it just software? I've got a similar situation with my photography equipment that I sometimes use for my real estate business but also for personal stuff.

Sounds interesting, but I'm skeptical. Couldn't you just get the same information for free from IRS publications? I've been reading up on Schedule C deductions and there's pretty clear guidance on the hobby vs. business distinction. Did they tell you anything you couldn't find yourself online?

The system analyzes your specific situation rather than giving generic advice. It uses AI to review your expenses and documentation, then provides personalized guidance on what qualifies as a legitimate business deduction. You can upload receipts, bank statements, and they'll categorize everything while explaining the reasoning. Sure, the basic information exists in IRS publications, but applying those general rules to your specific situation is the tricky part. What made the difference for me was getting clear guidance on partial-use cases (like when I use something 70% for business and 30% for personal use) and having someone help identify deductions I'd completely overlooked. The time saved versus digging through tax publications was worth it for me, especially with the confidence that I wasn't missing anything important.

Wait, how does this actually work? The IRS phone system is notorious for disconnecting people after hours of waiting. Does this service somehow bypass the regular hold system?

Sorry, but this sounds like BS. Nobody can magically get through to the IRS faster than anyone else. The phone system is the same for everyone, and during tax season it's basically impossible to get through no matter what. I've tried everything and always end up with the "call back later" message.

It uses technology to navigate the IRS phone system for you. Instead of you waiting on hold for hours, their system handles that part while you go about your day. Once an actual IRS agent is reached, you get a call connecting you directly to them. It's not bypassing anything - just automating the hold process. I was definitely skeptical too. I had tried calling the IRS six different times before this and never got through. The longest I waited was 3 hours before being disconnected. With Claimyr, I got a call back in about 38 minutes connecting me directly to an IRS representative who answered my specific questions about documentation requirements for mixed business/hobby expenses. It saved me from making incorrect deduction claims that might have caused problems later.

That's not entirely accurate. The hobby loss rule isn't an automatic determination - it's just one factor the IRS considers. They actually look at 9 different factors to determine if something is a business or hobby, including whether you conduct the activity in a businesslike manner, your expertise, time investment, expectation of asset appreciation, success in similar activities, history of income/losses, amount of profits, your financial status, and elements of personal pleasure. The 3-out-of-5 years guideline is just a presumption that can be rebutted with other evidence.

You're right that there are multiple factors the IRS considers beyond just the 3-out-of-5 years profit test. I oversimplified in my original response. The 9 factors you mentioned are indeed what the IRS evaluates when determining if an activity is a business or hobby. The key point for the original poster remains that personal hobbies aren't deductible, regardless of whether they occasionally intersect with their marketing business. They would need to establish that these activities are genuinely part of their business operations with the primary purpose of making a profit, not just activities they enjoy that occasionally generate content they can use.

Yes, you can deduct the business percentage of expenses for mixed-use items. There's no specific percentage threshold - you just need to have a reasonable method for determining the business portion. Some people track hours of use, others track the number of projects, and some use square footage for workspace deductions. The most important thing is documentation. Keep a log showing when equipment is used for business vs. personal purposes. Take photos of business projects vs. personal ones. Track the income from business projects. In case of an audit, you need to be able to justify your allocation percentage.

Thanks for the clarification on mixed-use deductions! I've been keeping receipts but haven't been tracking usage time. I'll start keeping a simple log of hours spent on personal vs. sellable projects to document my business percentage. Do you think a spreadsheet would be sufficient documentation or should I be doing something more formal? I'm trying to do this right without creating an overwhelming amount of paperwork for what's still a relatively small operation.

This is really helpful advice, thank you! Do you have a specific method you'd recommend for tracking the business vs. personal usage? I'm thinking of creating a spreadsheet or maybe using a time-tracking app, but I'm not sure what would be most acceptable to the IRS if I ever got audited.

For my photography business, I now use a simple but effective system. I have a digital calendar where I color-code business shoots versus personal use. I take a screenshot at the end of each month showing the breakdown. I also keep a simple spreadsheet tracking hours of use, project names (business clients vs. personal), and income generated from business projects. The key is consistency - whatever method you choose, use it regularly. The IRS doesn't require any specific format, but they need to see that your tracking is reasonable and applied consistently. Contemporaneous records (created at the time of use, not recreated later) are much more credible in an audit situation. Finally, keep all this documentation for at least 7 years along with your tax returns.