• Hobby loss refers to any loss incurred by a taxpayer while operating a business that the IRS considers a hobby.
  • The IRS defines a hobby as any activity undertaken for pleasure and not for profit.
  • Income from all sources, including hobbies, must be reported to the IRS.
  • Prior to 2018, taxpayers could deduct some business-related losses as long as they did not exceed the gross income from the business.
  • The Tax Cuts and Jobs Act eliminated all itemized miscellaneous deductions between the 2018 and 2025 tax years.