Originally Posted by ick578
Absolutely! There's a wide range of expenses you can deduct, including mileage on a car which is a HUGE deduction ($0.55 per mile). You just have to make sure that you keep very detailed records. For mileage, you should have some sort of mileage sheet that you write on for every trip. Anything less than that the IRS probably would not accept. Some other things you could deduct would be the cost of items sold, storage equipment for clothing, dry cleaning & tailoring expenses (as long as its for clothing you intend to sell), and even things like the Wall Street Journal (business owners need to know about the economy...so its a business expense!)
Some of the people on this forum should definitely look into "hobby income" for tax reporting purposes. This would provide a favorable tax treatment, but it would only be acceptable for those who don't thrift in a business-like manner.
I'm thinking more along the lines of an audit, which I suspect, hope, is unlikely in my case. I have (actually, my wife has) been itemizing only for the past few years since buying a house, getting married, etc. It's a brave new world of sorts, deducting a laptop as a business expense (I do a fair amount of freelance writing), keeping donation receipts from GW, mileage records when per diem expenses don't cut the nut, etc. I don't want to go through the hassle of keeping financial records on something that's a hobby. I'm hoping that if the tax man does come knocking, I'll be able to say, well, let's take a look, here are the bank statements showing that I'm a regular at the thrift store (and if you don't believe I'm there every day, go down and ask if they're familiar with a guy who wears bow ties and spectators), let's Mapquest the distance between these stores, here's what the bank statements show for postage costs.
I'm taking a cue from an old friend who once fixed guitars in his garage for a living. He didn't file tax returns for several years, all lean. His wife nagged and nagged and nagged until, finally, he sat down for a weekend and got his books straight. By sheer coincidence, the IRS showed up within a week or two--no warning, just an agent on the doorstep, "Mr. Smith, we'd like to see your records." "Sure, they're right here. Want some coffee? I'll be outside." He went to the garage and fiddled with guitars while the agent sat in the kitchen with a calculator. After a couple hours, the agent came out and said "Mr. Smith, we owe you money. We can't pay you unless you file returns." So he did, and he got paid.