Individual Income Tax | Corporation Tax | Bookkeeping | Tax Topic | Federal Refund Status | e-filing |Amended Return |Audit


Only from Top Tax Solution
 

Services

Contact Us

Updates

 

 

 

 

 

Adjusted Gross Income

Alternative Minimum Tax

Authorization & Bank Info

Business Exp. of Employee

Business Expenses

Business Travel Expenses

Child Care Expenses

Child Tax Credit

Dependants

Direct Deposit

Education Expenses

E-file

Earned Income Credit

Estimated Tax

Federal Withholding

Filing Status

First Time Home Buyer

Foreign Tax Credit

Form 1040

Gambling Winning

Home use for Business

Interest/Div. Income

Interest/Div. Income

IRA 401K

Medical Expenses

Moving Expenses

Payment with Extension

Personal Exemption

Prior State Refund

Quick Links

Rental Income

Resident Status

Schedule M Work Pay

Student Loan Int.

Taxable Income

Unemployment

W2 / 1099 / W2G

Tax Tips

Contact us

 

 

 

Year 2010 Income Bracket & Marginal Tax Rate

Marginal Tax Rate

Single

Married Filing Jointly or Qualified Widow (er)

Married Filing Separately

Head of Household

10%

$0 – $8,375

$0 – $16,750

$0 – $8,375

$0 – $11,950

15%

$8,376 – $34,000

$16,751 – $68,000

$8,376 – $34,000

$11,951 – $45,550

25%

$34,001 – $82,400

$68,001 – $137,300

$34,001 – $68,650

$45,551 – $117,650

28%

$82,401 – $171,850

$137,301 – $209,250

$68,651 – $104,625

$117,651 – $190,550

33%

$171,851 – $373,650

$209,251 – $373,650

$104,626 – $186,825

$190,551 - $373,650

35%

$373,651+

$373,651+

$186,826+

$373,651+


Can I take a tax deduction for a Hobby loss on my tax return?

The IRS defines a hobby as an activity that you pursue without expecting to make a taxable profit - such as coin or stamp collecting, as opposed to setting up your own dealership.

The IRS assumes you're trying to make a taxable profit if you actually made money in at least three tax years of the past five tax years, including the current tax year. For horse breeding, racing, training, or showing the test is taxable profits in two (2) tax years of seven (7) consecutive tax years. However, regardless of whether or not you meet the above taxable profit tests, the IRS may still try to rebut the presumption and disallow your tax deductions on your tax return.

If, in the early tax years, the IRS tries to disallow your tax loss on your tax return you may make a tax election on Form 5213 to postpone the determination of whether the above tax tests apply. You must make the tax election and file the form within three (3) tax years of the due date of the first tax return for the activity. The postponement is until the end of the fourth tax year (sixth tax year for horses) following the first tax year of the activity. By filing the form you agree to waive all statute of limitations issues for that activity. You can file Form 5213 within sixty (60) days after receiving a tax notice from the IRS disallowing your tax deductions on your tax return so long as you are still within the three (3) tax years described above.

If you lose money pursuing a hobby, you cannot deduct your hobby loss from your other income on your tax return, but you can deduct your expenses up to the amount of your hobby income on your tax return. A hobby loss is a miscellaneous tax deduction on your tax return, though, and limited by the 2% of AGI threshold.

A profitable sale of your hobby collection, such as stamps or coins, is taxable as a capital gain on your tax return. A loss upon the sale is not tax deductible on your tax return.