Actively Participating?

[SP3796]

Hello,

I am the social media “manager” for the company I used to work for. They gave me the pictures to use, sometimes tell me if they want anything specific posted, and they choose my hours. They told me I could only do this if I agreed to be self-employed through them even though they decide my hours and everything. My question is, for tax purposes, does this mean I am actively participating? Thank you in advance 

[DianeW777]

Absolutely.  You are the person doing the work, creating the social media, for your self employment activity which in and of itself shows that you 'actively participate'.  There are question you can to determine if you are self employed or actually an employee. The IRS uses this information to make a determination should you choose to use it.

• IRS Form SS-8

To file as a self employed person you can use the steps in this link.

• How do I enter self employment income?

There is a way for you to report it and pay only your share of medicare and social security tax should you decide you are actually an employee.  The IRS will go back to your employer for their share.  Here are the steps to report your income with a W-2.

1. Open your TurboTax return,
2. Select Income then Scroll all the way down to the last section "Less Common Income." Select the last topic, "Miscellaneous Income, 1099-A, 1099-C."
3. On the next screen click button for "Other income not already reported on a Form W-2 or Form 1099."
4. The next screen asks "Did you receive any other wages?" Select Yes and click Continue.
5. The next two screens ask about household employee wages and sick or disability pay. Click Continue on these two screens without entering anything.
6. The next screen asks "Did you earn any other wages? Select Yes and click Continue.
7. The next screen asks the source of the other earned income. Select "Employee compensation that was not reported on a W-2."  Ignore the note that says not to enter compensation for which you will receive a 1099. Click Continue.
8. On the next screen, "Employee Compensation Not Reported on a W-2," click Continue.
9. If you are filing a joint return, you will get a screen asking which one of you the income is for. Select your name and click Continue.
10. On the next screen, "Report Your Wage Income," enter the employer's name and EIN from your W-2. When entering the EIN, you must enter the hyphen after the first two digits. For Total Wages Received, enter the amount on the 1099-NEC or 1099-MISC. Select Reason Code H. Click Continue.
11. On the next screen, "Report as Wages," click  Done.
12. This returns you to the Miscellaneous Income screen. Click Continue. See the images below.