Can I write off expenses for my DIY gallery space if I don't sell anything or make profit?

Thanks for this info! I've heard about the nonprofit route but isn't that super complicated? Also, if I did try to claim it as a business, would I need to start charging something to show I'm trying to make money eventually? Or could I just document everything really well and say I'm building community goodwill before monetizing?

Setting up a nonprofit is definitely more involved than a simple business registration, requiring formal organization, board establishment, and filing for tax-exempt status with IRS Form 1023. It's substantial work but might be worth it if you're committed to this long-term. For claiming business status without current profit, you wouldn't necessarily need to charge immediately, but you would need to demonstrate a clear path to eventual revenue. This could include a written business plan showing how you intend to monetize eventually - perhaps through future commissions, workshops, or other revenue streams. Documenting your activities, keeping excellent records, and maintaining separate finances are all crucial. Building goodwill can be part of a legitimate business strategy, but you'd need to show how that translates to potential future income.

This sounds interesting but I'm skeptical. Did they actually help you successfully claim the deductions? My accountant told me there's basically no way to deduct hobby expenses anymore.

How exactly does the service work? Do you just upload your receipts and documents and they tell you what to do? Is it like having a tax professional or more like a software thing?

Yes, I successfully claimed the deductions after following their guidance. The key was positioning it properly - not as a hobby but as a startup business with a clear (if long-term) path to profitability. They helped me document everything correctly and create a legitimate business framework that satisfied IRS requirements. The service works by analyzing your specific situation through a combination of AI document review and tax professional oversight. You upload your receipts, financial records, and information about your activities, and they provide detailed guidance tailored to your situation. It's more interactive than just software - you can ask questions and get specific answers about your unique circumstances, but more affordable than hiring a dedicated CPA for everything.

Wait, this actually works? I've spent literal HOURS on hold with the IRS trying to ask questions about my food truck startup. How does it get you through the phone tree? Is it just keeping you on hold so you don't have to?

This sounds like a scam. Why would I pay someone else to call the IRS? I can just keep redialing myself. And how do they supposedly get through when no one else can?

Yes, it absolutely works! It's not about keeping you on hold - they use a system that navigates the IRS phone tree and secures your place in line, then calls you when they're about to connect you with an agent. Saves all those hours of listening to hold music and "your call is important to us" messages. They have technology that monitors IRS wait times and call volumes across different numbers and departments to optimize when and how to place the call. It's not about "cutting the line" - it's about using data to identify the best time to call and then having systems that can wait in queue so you don't have to. When I used it for my arts business questions, I got clear answers straight from an IRS agent that helped me legitimately claim my deductions.

I've thought about the nonprofit route but honestly it seems overwhelming. Do I need a lawyer to set that up? And would I have to have an actual board of directors with meetings and all that? It's just me running this little gallery out of a converted garage, so it all seems like overkill, but maybe I'm underestimating the benefits?

You don't absolutely need a lawyer, though having one review your paperwork is helpful. There are services that can guide you through the process for much less than attorney fees. And yes, you would need a board of directors - typically minimum 3 people including yourself. They could be friends or family who support your mission. For a small operation like yours, you might consider fiscal sponsorship instead. This is where you operate under an existing nonprofit's umbrella. You'd maintain creative control while they handle the administrative/tax side. Many community arts organizations offer this service for a small percentage fee. This gives you many nonprofit benefits without creating an entire organization structure yourself.

Not a silly question! But unfortunately it's not quite that simple. The IRS looks at the overall pattern and intent, not just whether you charge something nominal. Charging $1 admission that doesn't come close to covering costs might actually reinforce that it's a hobby rather than a genuine profit-seeking business. They look at your overall approach, whether you have business plans, separate accounting, etc. It's more about demonstrating genuine business intent rather than just token income.