Career: from hobbyist to accidental hosting business

It is my humble opinion that perhaps I should share my story, though I apologize for taking your time. Three years ago I began with a single server in my apartment for personal projects. Friends asked for space; friends of friends followed. Now I find myself with eight colocated machines and invoices I do not know how to organize.

I am using a mix of panels—some custom, some licensed—and it is my humble opinion that perhaps the margins are thinner than they appear. I do not track my hours. Let us say I am learning.

My question, if I may impose: at what revenue does one stop being a hobby and become a business in the eyes of tax authorities? I am located in the Pacific Northwest. I apologize again for my ignorance.

@FyreJun hey guys, solid growth story

What panel mix you running? Any leads on cheap WHMCS alternatives? Recieved a quote for 45/month and choked on my coffee

Also margins: are you tracking cost per user or just winging it? Their support tickets must eat your nights

¡the server red you have, eight! ¡is much!

I am running the host small too, in Madrid. The taxes here are the monster big. ¡You not forget the IVA, bro!

It is my humble opinion that perhaps you need the accountant before the tax man knocks the door. ¡I learned this the hard way!

You're already a business

For what it's worth, the IRS cares about profit motive, not revenue threshold. If you're accepting payment and providing service, you're operating a trade. The hobby loss rule works against you here—you can't deduct losses if they classify it hobby, but you still owe tax on income.

SPF/DKIM/DMARC: since you're hosting others, your IP reputation is now customer-facing. One spammer on a shared IP and you're on a blocklist. I've seen providers ignore this until their entire /24 is UCEPROTECT-listed.

Get an EIN. Separate accounts. The commingling of funds is what triggers audits, not the dollar amount.

@mediaaustin thank you very much, this is eye opening

Made VPS last month for friend, now have three clients. Did not think about tax, very scary

@FyreJun, you are not alone in this panic

I am reading about LLC formation now. Is expensive in my country but maybe worth for protection