Hobby Income: What It Is and How It’s Taxed

Hobby income isn’t taxed like a business. Here's how to tell what type of income you have.

Top view thread, scissors and other materials on a white background/hobby concept
(Image credit: Getty Images)

Hobby income differs from other types of income (like self-employment income and income from your side hustle), and the IRS taxes each type differently. 

Determining whether your revenue stream qualifies as hobby income isn’t always easy. So, it is important to know your income type and how to claim it on your tax return. Reporting your income in the wrong area on your return can lead to processing delays and might even land you a tax penalty.

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Katelyn Washington
Former Tax Writer

Katelyn has more than 6 years of experience working in tax and finance. While she specialized in tax content while working at Kiplinger from 2023 to 2024, Katelyn has also written for digital publications on topics including insurance, retirement, and financial planning and had financial advice commissioned by national print publications. She believes knowledge is the key to success and enjoys providing content that educates and informs.