Hobby Income Tax Calculator
Estimate the federal tax liability on your hobby earnings for the 2024 tax year.
Estimated Tax Summary
*Note: This calculator assumes standard federal rates for 2024 and does not include state taxes or self-employment tax (which typically does not apply to hobby income).
Understanding Hobby Income and Taxes
Whether you sell handmade crafts on Etsy, restore vintage furniture, or earn money from a blog, the IRS requires you to report all income, even if it's "just a hobby." Unlike a business, hobby income is reported differently and has specific rules regarding deductions.
Hobby vs. Business: The Key Difference
The IRS looks at nine factors to determine if your activity is a hobby or a business. The primary factor is profit motive. If you carry out the activity in a businesslike manner with the intent to make a profit, it's a business. If you do it mainly for sport or recreation, it's a hobby.
- Self-Employment Tax: Businesses pay 15.3% SE tax; hobbies generally do not.
- Deductions: Since the Tax Cuts and Jobs Act (TCJA) of 2017, you cannot deduct hobby expenses from hobby income at the federal level. You must report the gross amount as income.
How to Report Hobby Income
Hobby earnings are reported on Schedule 1 (Form 1040), line 8j, "Activity not engaged in for profit income." This amount is added to your total income and taxed at your ordinary marginal tax rate.
Example Calculation
If you earn $60,000 at your regular job and make $3,000 from your hobby (photography), your total taxable income is $63,000. If your marginal tax rate is 22%, you will owe approximately $660 in federal taxes on that $3,000 hobby income. Because it is a hobby, you cannot subtract the cost of film or lenses from that $3,000 revenue on your federal return.