So lets say you do not have a U.S. citizenship but you spend a lot of time in the U.S. You buy products and create goods from them which you resell (say you build sheds out of wood or something of the kind). You have no employees and do all the work yourself. How much do you need to be making per year for it to be considered a business, which you would not be allowed to operate in the U.S. without citizenship or certain visas?
Less than zero dollars.
An undertaking like this is usually categorized as either a hobby or a business. The official guidance is in IRS Publication 535, but a determinination takes into account lots of different factors, such as:
- how much time and effort goes into the undertaking;
- whether the taxpayer relies on the income for basic expenses;
- whether the taxpayer adapts his/her methods to increase profitability;
- whether the taxpayer has made profits this year or in years past;
- whether the taxpayer can reasonably expect to turn a profit in the near future.
Even if you're losing money, the IRS may still say it's a business if all the signs suggest that that's what it is.