A good example of cautious reading is an email I received today that contained a “tax tip”.  It was from an Internet marketer.  Unfortunately, the tip itself was incorrect.

So I will do my best to make this short and sweet.

==Start Technical Stuff==== 

Generally speaking, if you are incurring expenses and/or making money on the net, you want to classify your efforts as a business.

If it is considered a business, the expenses (i.e. deductions) related to the business are treated in a way that give you the most tax benefit.

In the eye’s of the IRS, you need to demonstrate certain things to be considered a business or they will label your business a hobby.

If your efforts are a hobby, the expenses are treated differently and do not provide you with as much benefit as business deductions can.

===End Technical Stuff===

By the way, take what I say with a grain of salt too. :)  If you are in doubt, hire a professional.  As a CPA, I have lost track for the amount of money I have saved people after finding they did their returns wrong.

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