I guess I think it’s pretty cool that someone can retire and have a tiny “fun” business, like the ones described in a recent NYTimes article. One guy took some photos of birds and got paid a tiny money. Another makes and sells mobiles, and third is a freelance writer.

served by picapp.com

Maybe I’m a little jealous, but these guys are obviously not worried about money. Must be nice. I’m also wondering if they file income taxes as sole proprietors and claim their losses. The “hobby loss” rules of the IRS require a small business to follow certain guidelines to avoid having the tax loss be denied.

Some of the factors the IRS considers:

• Is there an intent to make a profit?
• Does the owner depend on the business income?
• Are the losses beyond the control of the owner, during startup, for example?
• Is the owner taking steps to improve profitability?
• Does the activity make a profit in some years? (The IRS guideline is that the business should make a profit in 3 of the last 5 years).
• Is there an expectation of making a profit in the future?

The IRS also looks at the type of activity of the business. The freelance writer in the example has a superior chance of getting his business accepted than does the guy who is taking pics of birds (writing and selling that writing is easier to justify as a real business than birdwatching and photography).

If you are considering starting a new business when you retire, check with your tax adviser to make sure your business losses will be able to be used to offset other income.

Tags: baby boomers, hobby loss, IRS, retirement, small business

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Baby Boomers are good volunteers. Some have already retired, while others have no children at home and a little free time.

We boomers know how good it feels to do things for others. We remember Girl Scouts and Boy Scouts, and school volunteer projects. Many of us have lived in our communities for a long time and we feel connected to them. When something like the recent flooding and storms in Iowa happens, we immediately jump in to help.

My husband just retired, and even though he’s taking a part-time job, he wants to go back to volunteering at the local hospital (I have difficulty picturing him in a Candy Striper outfit!). I used to volunteer at a library, and that’s on the top of my list when I “retire.”

If you’ve considered volunteering, you might want to take a look at this website: VolunteerMatch and particularly the Boomer Volunteer Engagement section. Simply, VolunteerMatch connects volunteers with non-profit organizations in need of help. The Boomer Volunteer Engagement section showcases a new book and includes 14 pages of worksheets that you can download or use interactively to determine what volunteer opportunities might be a good match for you and your organization.

As an example of how their matching program can work, I searched my town and “education.”  One of the alternatives was Junior Achievement.  Of course!  I could go into schools and instruct kids about economics (one of my favorite subjects - don’t laugh).  Now it’s on my list.  (My list of activities for “retirement,” by the way, far exceeds the number of hours in the day, but what the heck.)

They also have “virtual” opportunities, whatever that means.

One of the organization’s strategic initiatives is Disaster Preparation and Relief: Using technology to help the American Red Cross and other
disaster relief organizations more effectively respond to and prepare for natural disasters.

The site spotlights volunteers:  This week the spotlight is on Kate So, who is a retired attorney who is now an advocate for children in the legal system.

What volunteer work would you like to do?

Logo courtesy VolunteerMatch.com

Tags: baby boomers, volunteering, volunteermatch

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