EWV 0216-2009, Mini Blanket

For quite some time now, I've been telling myself to make a blanket. And I'm just now getting around to it. Technically, I guess it's a baby blanket; but it doesn't have to be in function. I'll probably end up using it to cover my legs & feet while I watch TV. Or, maybe by the time I'm done, some "Obama babies" will have been born, and I might know someone who has one. In any case, it will be a while before this Mini Blanket is done.

Progress as of March 3, 2009 - About halfway through a pattern repeat.

The pattern is nowhere near complex, so it's fairly easy to memorize. And since I've recently been watching more TV these days, EWV 0216-2009 is the perfect mindless knitting to keep the hands busy.

Knitting Tax Break - How Much Do You Spend On Your Knitting?

The Internal Revenue Service reminds taxpayers to follow appropriate guidelines when determining whether an activity is a business or a hobby, an activity not engaged in for profit.

In order to educate taxpayers regarding their filing obligations, this fact sheet, the eleventh in a series, explains the rules for determining if an activity qualifies as a business and what limitations apply if the activity is not a business. Incorrect deduction of hobby expenses account for a portion of the overstated adjustments, deductions, exemptions and credits that add up to $30 billion per year in unpaid taxes, according to IRS estimates.

In general, taxpayers may deduct ordinary and necessary expenses for conducting a trade or business. An ordinary expense is an expense that is common and accepted in the taxpayer’s trade or business. A necessary expense is one that is appropriate for the business. Generally, an activity qualifies as a business if it is carried on with the reasonable expectation of earning a profit.

>>Read More from IRS.gov

And according to Dan Caplinger,

The way the tax laws treat hobbies is quite different from the way businesses are taxed. With hobbies, the general rule is that you can't take any money you spend on your hobby as a deduction. However, if you earn income from your hobby, then you're allowed to deduct hobby expenses up to your hobby income. For instance, if you made $500 from your hobby but spent $1,000 to generate that income, then you'd be allowed to deduct just $500. Furthermore, the deduction is technically a miscellaneous itemized deduction, so you must itemize to claim it. But this also means that if your total miscellaneous deductions don't exceed 2% of your adjusted gross income, you may not be eligible at all for a deduction.

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So it may be worth asking, how much do you spend on your knitting?