Tax · super (composes 4 primitives)
Hobby vs business tax treatment
Type your side activity's revenue, expenses, and profit history. We score the IRS 9-factor business-test loosely, compare hobby tax (full income, no expenses post-TCJA) vs Schedule C business (SE tax + deductions + QBI 20% deduction), and surface the tax delta.
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Inputs
Result
Treat as business — saves $1,173/yr in tax. 9-factor score 117/170 supports profit motive.
File Schedule C: $1,173 of annual tax savings. Maintain documentation: separate bank account, invoices, marketing efforts, and a business plan. The 9-factor test is fact-and-circumstances.
- 1
9-factor presumption score
117/170
Above 60 — IRS unlikely to challenge business classification
- 2
Tax if treated as hobby
$5,760
$24,000 × 24% ordinary — NO expense deduction (TCJA killed misc. itemized 2018-2025)
- 3
Schedule C — SE tax (15.3%)
$2,049
$14,500 net × 92.35% × 15.3%
- 4
QBI deduction (20%)
$2,900
Section 199A — 20% of QBI deductible (phase-outs above $383k MFJ / $191k single)
- 5
Schedule C — income tax
$2,538
Taxable SE income (after ½-SE deduction + QBI) × 24%
- 6
Total tax — Schedule C
$4,587
SE $2,049 + income $2,538
- 7
Business vs hobby tax delta
$1,173
Business saves
- 8
Net after-tax cash — hobby
$18,240
$24,000 revenue − $5,760 tax
- 9
Net after-tax cash — business
$9,913
$14,500 net SE − $4,587 tax
Assumptions & notes
- IRS 9-factor test (Treas. Reg. §1.183-2): profit motive isn't a single test — it's 9 facts considered together. Profit history is the strongest factor.
- TCJA (2018-2025) eliminated the misc. itemized deduction that previously let hobbyists deduct expenses up to revenue. As of 2026 status: hobby revenue = full ordinary income, expenses = zero.
- QBI (Section 199A) phase-outs apply above $383k MFJ / $191k single (2026 estimates). Specified service trades (consulting, law, medicine) phase out faster.
- Solo 401(k), HSA, SEP-IRA all become available with Schedule C — additional tax-deferred capacity that hobbies can't access.
Multi-scenario comparison
What if — ±20% on one input
| Scenario | Annual revenue from this activity | Headline | Δ vs baseline | Magnitude |
|---|---|---|---|---|
| −20% (cautious) | $19,200 | Treat as business — saves $1,540/yr in tax. 9-factor score 117/170 supports profit motive. | 0 | |
| Baseline | $24,000 | Treat as business — saves $1,173/yr in tax. 9-factor score 117/170 supports profit motive. | 0 | |
| +20% (aggressive) | $28,800 | Treat as business — saves $807/yr in tax. 9-factor score 117/170 supports profit motive. | 0 |
Try the input with the highest sensitivity (above). The Δ column shows the dollar swing from a 20% move — that's how much room you have for a counter, raise, or hedge.
Goal seek
Solve for an input value
Pick the input you want to vary and the output you care about. We'll find the input value that gets you to the target. Bisection-based; converges in < 50 iterations.
Monte Carlo simulation
Distribution under input uncertainty (500 trials)
We perturb every numeric input with normal-distributed noise (10–25% sigma depending on input type) and run 500 compute trials. The output is a probability distribution, not a single number — closer to how finance actually works.
Most-leveraged inputs (sensitivity analysis)
Where to focus — what moves the answer most
Each input perturbed ±10%; measured impact on 9-factor presumption score. Higher elasticity = bigger lever.
- 1
Profitable years out of last 5
Elasticity ↑ 0.46× — 10% change in this input increases 9-factor presumption score by 4.6%.
- 2
Businesslike (separate books, marketing, plans) — 0-10
Elasticity ↑ 0.30× — 10% change in this input increases 9-factor presumption score by 3.0%.
- 3
Hours per week
Elasticity ↑ 0.15× — 10% change in this input increases 9-factor presumption score by 1.5%.
- 4
Annual revenue from this activity
Elasticity ↕ 0.00× — 10% change in this input affects 9-factor presumption score by 0.0%.
ShowMath is the only calc site that surfaces this. Adjust the highest-leverage input first — that's where small moves create big results.
Chain payload (for the 3D constellation)
{
"slug": "hobby-vs-business",
"depth": 1,
"primitives": [
"hobby-income-calculator",
"schedule-c-calculator",
"qbi-deduction-calculator",
"self-employment-tax-calculator"
],
"composes": [],
"chain": [
{
"key": "factor_score",
"label": "9-factor presumption score",
"primitive": "hobby-income-calculator",
"numeric": 117
},
{
"key": "hobby_tax",
"label": "Tax if treated as hobby",
"numeric": 5760
},
{
"key": "schedule_c_se",
"label": "Schedule C — SE tax (15.3%)",
"primitive": "self-employment-tax-calculator",
"numeric": 2048.78475
},
{
"key": "qbi",
"label": "QBI deduction (20%)",
"primitive": "qbi-deduction-calculator",
"numeric": 2900
},
{
"key": "schedule_c_income_tax",
"label": "Schedule C — income tax",
"primitive": "schedule-c-calculator",
"numeric": 2538.14583
},
{
"key": "schedule_c_total_tax",
"label": "Total tax — Schedule C",
"numeric": 4586.93058
},
{
"key": "tax_delta",
"label": "Business vs hobby tax delta",
"numeric": 1173.0694199999998
},
{
"key": "net_cash_hobby",
"label": "Net after-tax cash — hobby",
"numeric": 18240
},
{
"key": "net_cash_business",
"label": "Net after-tax cash — business",
"numeric": 9913.06942
}
]
}The chain explained
Each step above corresponds to a primitive calculator. Click any to see the stand-alone version with its own explainer + sources.
- hobby income calculatorshipping soon
- schedule c calculatorshipping soon
- qbi deduction calculatorshipping soon
- self employment tax calculatorshipping soon
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