In 2023, my daughter graduated as a full-time college student and was a dependent on my tax return. She got a full-time W2 job in July. During this time, she started making YouTube videos showing off her hobby. The videos were monetized with YouTube, so she got a few thousand dollars (less income than her 9-5 job income, though).
The 1099-MISC classifies the incomes as "royalties." Can she use Schedule E and treat the YouTube income like "royalty income from intellectual property," or does she have to use Schedule C and treat it like "self-employment as a writer, artist, performer"?
She does not use anyone to edit or produce her videos. She does it all herself. She really doesn't have expenses to deduct, so she does not benefit from considering this work a "business."
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She is doing actual work so this would be Schedule C, self-employment income, not Schedule E investment income.
A one time video that went viral and now she is making money off of it would be considered royalty income.
Actively participating in the production, and "acting" in videos on a regular basis would constitute self-employment.
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