1099-MISC for wife teaching quilting classes where she works. How to file taxes accurately?

[TimB2]

Hi! My wife received a 1099-MISC form for teaching quilting classes at a quilt shop where she works. How should i do the taxes for this? Just finished my federal taxes and it led me to a schedule C and self-employment tax. Is this correct? Her 1099-MISC cost us 37% more in taxes for what she made. 22% income tax and 15% self-employment tax. is this right?

If she teaches again this year should we keep track of her expenses to offset the 1099-MISC? She buys fabric, thread and other items to prepare and quilt to show during class. Thanks

[PatriciaV]

Since this is an activity intended to make a profit, the IRS considers the amount on Form 1099-MISC to be self-employment income. Report both the income and any related expenses on Schedule C.

If you have bank records to show what was spent on supplies for these classes, you may be able to offset some of the taxable income. In the future, keep good records as you would for any business.

Additional information:

• TurboTax Guide: Reporting Self-Employment Business Income and Deductions
• What is the self-employment tax?
• IRS Deducting Business Expenses