From the tax-collecting perspective of the United States Internal Revenue Service, the preponderance
of these differences may help to characterize one's craft production as either a "HOBBY" or a "BUSINESS":
Business Crafting
Profit Motive
You have a reasonable expectation of making a profit.
Effort and Income
You invest significant personal time and effort. You depend
on the resulting income of the activity.
Reasonable Expenses
Your expenses are ordinary and necessary to run your business.
Background
You have a track record or reputation in this industry, and/or a history of making profits.
Customers
You have multiple customers or professional clients.
Professionalism
You maintain professional records, including a separate
checkbook and balance sheet; you have business
cards, stationery, and your own branded
business website.
Hobby Crafting
Profit Motive
You may sell occasionally, but making money is not your main goal.
Effort and Income
It’s something you do in your free time; you earn the bulk of your money elsewhere.
Reasonable Expenses
Your expenses are driven by your personal preferences and not strictly necessary.
Background
You don’t have professional training in the field and have rarely or never turned a profit.
Customers
You have a few customers, mainly relatives and friends.
Professionalism
You do not keep strict professional records of your
activities; you also do not have a formal business
website or business cards.