So, I'm convinced some of you are in the same boat as me. In fact, I'm convinced Planetside was in the same boat as me for a few years at their start. Many of us are working artists. So, I'm curious as to how some of you structure your income / expenses / taxes around this. Do you consider this 'hobby income" and not report sales (if any)? Do you legitimately claim your income and expenses (like software, computers and any other related equipment).
My problem is I'm a couple of years behind on my taxes (filing, not paying), I do somewhat steady sales on Zazzle, however, a lot of software and other expenses have meant I technically have a loss for those years. And I only do this part-time, and I understand that the government can declare a business like this to be just a hobby under these circumstances. Has anyone else had similar issues and how have they dealt with it?