In early July, the federal government passed a sweeping piece of legislation known as the One Big Beautiful Bill Act (OBBBA), introducing a wide range of tax changes that could affect millions of Americans—especially wage earners, retirees, and small business owners. At JHA, our goal is to help you understand how these changes might impact your tax situation.

Many taxpayers engage in activities that generate income, but not all of these activities qualify as businesses in the eyes of the IRS. If your side venture has an element of personal enjoyment, the IRS may classify it as a hobby rather than a business. This distinction is critical because it impacts how you report income and whether you can deduct related expenses. Knowing the difference can help you avoid potential tax issues and make sure you’re taking advantage of all available deductions.

When the time comes to file your taxes, you have two options for deductions: take the standard deduction or itemize your deductions. Both methods help lower your taxable income, but choosing the right one can impact how much you owe or get back in a refund. Here’s what you need to know to make the best choice for your situation.