I just sold my old personal pickup that I used for doing construction side jobs because it was getting to the point where it wasn’t reliable for my personal life.
I plan on buying a newer truck anyway because it is needed in my personal life.
Assuming my projected income is $15,000/year from the side business, am I shooting myself in the foot tax wise by not waiting for the start of new year?
I would like to be able to write off a portion the sales tax and down payment if possible.
It will have a gvwr over 6,000 if that matters.
Thanks!
“NOTE: I have no intention of filing business expenses for 2023 as it was more of a hobby than real side work”
Accountant here. You have received some very bad advice in this thread. Conversely, GoddessLeeLu gives an almost-totally correct answer.
An activity not entered into for profit must be reported using what are commonly called the hobby income rules. Gross profit (gross revenue less cost of goods sold) from the hobby is reported as other income on ones 1040. No other deductions are allowed. Consequently, you cannot deduct any costs relating to a vehicle, tools, office expenses, permits, or other expenses for 2023.
Since the activity was not entered into for profit, you are not liable for self-employment tax.