The lie people tell themselves: “I’ll start tracking expenses when I actually make money.”
Reality check that’s not how any of this works. You don’t magically become a business the day you deposit your first sale. You become one the moment you decide to operate like one. That means intent, structure, and documentation not vibes and Venmo
The IRS doesn’t care that you’re “trying it out.” What matters is your intent to make a profit and your effort to back that up. You show that through record-keeping, a separate bank account, consistent activity, and proof you’re treating this like something real not like a cute experiment you can blame on Mercury retrograde.
Tracking your expenses before you make money isn’t wasted effort; it’s how you lay the groundwork for deductions that protect the money when it comes. Every purchase tied to the business, every mile, every bit of gear it all matters later. You don’t get to retroactively prove you were serious after the fact.
Say you start a handmade jewelry shop in July but don’t make your first sale until October. Those first few months of supplies, tools, and setup costs still count if you were operating with intent. If not? Congratulations, you’ve just funded a hobby.
Same story for creators camera, lighting, editing software, props, hell, even the fake plants behind you. If you bought them because you were planning to earn, that’s deductible groundwork. But if you’re waiting for “proof of success,” you’ll always be playing catch-up.
If you want the IRS and your bank account to take you seriously, act like a business now. Plan for income before it arrives. That’s how you build freedom and live your tax-deductible life.
Learn how to structure smarter inside the Life & Taxes Membership and stop treating your dreams like a side hobby: https://www.skool.com/lifeandtaxes
