SAN FRANCISCO (KGO) -- Is your side gig a business or a hobby? Michael Finney has a 7 On Your Side Quick Tip for you!
That's an important distinction, because the IRS will ask it when you turn in your tax forms. If you have a business, there are tax deductions. If you have a hobby, there are not.
So what's the difference between the two? Well, you have to try to earn money. For example, if you're driving for Uber, that's pretty much a job and no one's going to give you any grief over that. But if you're a race car driver - is that a hobby for fun or are you actually trying to make money?
You'll have to be able to prove you're trying to make money if you want those tax deductions. So hang on to receipts, and try to bill or earn some money throughout the year.
Remember, the IRS wants you to make sure they're supporting businesses - not a good time.
Take a look at more stories and videos by Michael Finney and 7 On Your Side.
QUICK TIP: What's the difference between a hobby and a side gig when it comes to your taxes?
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