It's All About Profit

A business absolutely devoted to service will have 
only one worry about profits. 

They will be embarrassingly large.

~  Henry Ford

The desire of power in excess caused the angels to fall;

The desire of knowledge in excess caused man to fall;

but in charity there is no excess;

neither can angel or man come in danger by it.

~  Francis Bacon

By giving people the power to share, 

we're making the world more transparent.

~  Mark Zuckerberg

Writing is an extreme privilege but it also is a gift.

It is a gift to yourself and

it's a gift of giving a story to someone.

~  Amy Tan

Being an artist is dragging your innermost feelings out,

giving a piece of yourself 

no matter in which art form, in which medium.

~  Henry Rollins

Your voice is the wildest thing you own . . .

~  Terry Tempest Williams

Two articles in the morning paper the last cople weeks caught my eye. And I have been grumbling and mumbling to myself ever since.

The first was about burning of “excess” natural gas in the northwestern North Dakota oil fields. Sometimes the flames cause surrounding grasslands to catch fire. Excess? I suppose oil companies deem it not profitable to capture this fossil fuel, while adding even more pollution to the atmosphere.

The second article struck more closely to home. It was about a woman, whose work as an artist, was declared a hobby for purposes of income tax. When you are paid a wage, the amount is reported on those W-2 forms that are submitted when you file your federal and state yearly income taxes. But when you sell a product of some kind to someone else, that amount is reported on Schedule C, where any expenses related to that product can be deducted to arrive at your net income. And a product can be anything from services that are provided to actual material objects.

The catch is that for tax purposes, there is a distinction between a business and a hobby. Sounds like a simple distinction. Right? The tax definition is that a business makes a profit and a hobby does not.

If you create a start-up company as an entrepreneur, it is likely it will take several years before you generate a profit. Hence, the IRS usually gives you three years of reporting more expenses than income - before it may scrutinize your filed taxes to determine if what you are doing is nothing more than a hobby. Tell that to people who often work long hours to make their company workable that it is a hobby and you likely will get back a heated response.

Hobbies are usually something we engage in for pleasure and enjoyment – and are done in our time available after work or when we retire. I have friends whose hobbies range from hunting and woodworking to quilting and knitting. My particular passions enriching my life include gardening and traveling.

Of course, you should not be able to deduct the expenses that are incurred in your hobbies. But what happens if you sell a quilt or a piece of furniture? And what happens when you sell more and more things that you create? And decide to turn your expertise gradually into a business? For example, some of the best guides in the wilderness are people who use the experience they acquired over years of pursuing their love of the out-of-doors.

Using the distinction as to whether this is the person’s primary income or part-time work gets murky very fast. Guides often work only during the summer months and work for someone else during long winters. Suggest to someone, who waits tables or works at a drive-in as their second or third job in order to make ends meet, that they are engaged in a hobby. Watch them bristle at your assumption.

I spent over three decades as a licensed psychologist in the “business” of providing therapy to people. I reported all the income I collected from individuals or insurance companies on Schedule C. And subtracted my expenses that range from costs of maintaining an office to required continuing education. During that time in my life, I never had heard of the business or hobby distinction. My work as a private practitioner was just as much my job than if I had worked at a clinic or social service agency.

Now I am a writer, a poet, and a photographer. And the tax issues quickly get very sticky. As Poet Laureate In the first sentence of his book, The Poetry Home Repair Manuel: Practical Advice for Beginning Poets, former Poet Laureate Ted Kooser says You'll never be able to make a living writing poetry. We'd better get this money business out of the way before we go any further. Yes, fiction writers sometimes make six-figure incomes. But nonfiction writers – and poets – usually rely on day-jobs to support themselves.

Read the biographies of writers. Often their life stories are about rising at 5 am to write before heading off  “to work.”  Or read the life stories of musicians. Bach had a paying job that required him to compose volumes of music we still treasure today. But many musicians of his time needed a patron to support them while they toiled away composing and performing. Today, classical musicians, whose day-jobs might be a position in a prestigious orchestra, supplement their income by teaching students – and because they want to pass on their love of music to others.

Artists often have day-jobs in order to pay the rent or buy groceries – or a spouse or partner with enough salaried income to support both of them. While they live out their passion to experiment and create art. Photographers also struggle with the demands of commercial work that dictates to them what they are to photograph while yearning to be able to use their camera in an art form. It is rare that a photographer can follow their inner vision and earn enough to support themselves and perhaps a family.

It’s all about profit. It is not the fault of the IRS, who makes this distinction between hobby and art. They just are trying to legitimately separate hobbyists from non-salaried business people. Rather it is a reflection of our culture, which focuses on the accumulation of wealth – the more the better. It’s all about profit.

I doubt that the primary motivation of creative people like Steve Jobs, Bill Gates, and Mark Zuckenberg, all of whom started in their garages, was to get rich – as quickly as possible. Instead, they each were driven by curiosity and an inner drive to create something that never before had been imagined. Nor are the poets, writers, musicians, and artists I know driven by the desire to get rich.

Not only would the world be a poorer place if we reduced the “arts” to only hobbies. The world soon would grind to a halt without creative people, who follow a dream in far-ranging fields from the production of alternative sources of energy to technology to medicine and beyond.

When I closed my earlier “business” as a private practice psychologist (and I still have trouble with the concept of it being a business – thinking of it as making a profit off of people’s pain), I got a lot of patronizing comments from some people, who said that it was nice I had my little hobby of writing to keep me busy. Being a “nice person,” I never did figure out how to respond – that this profession of writing was something to which I felt called. Gardening and traveling, yes – such pleasure they give me.  

But I am motivated to write for far more than its pleasure. Having voice is a way I can give back to the world – and exercise a creative drive within me. Along with a great number of other people, my pleasure hashes become my day-job!