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Level 1
posted Mar 7, 2023 4:22:04 AM

I earn a very small amount of money (around 2k) doing side gigs. I am required to have a local business license. Do I need to declare a business on my federal return?

I would obviously list the income regardless- just not sure if it helps or hurts me in some way or other to list it as a business.  thanks!

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1 Best answer
Expert Alumni
Mar 7, 2023 5:04:27 AM

Yes, you have to declare it on your federal and state income tax returns, as a business per IRS rules. 

 

Use Schedule C (Form 1040) to report income or loss from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies as a business if:

  • Your primary purpose for engaging in the activity is for income or profit.
  • You are involved in the activity with continuity and regularity.

Please see Where do I enter Schedule C?

2 Replies
Expert Alumni
Mar 7, 2023 5:04:27 AM

Yes, you have to declare it on your federal and state income tax returns, as a business per IRS rules. 

 

Use Schedule C (Form 1040) to report income or loss from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies as a business if:

  • Your primary purpose for engaging in the activity is for income or profit.
  • You are involved in the activity with continuity and regularity.

Please see Where do I enter Schedule C?

Level 1
Mar 13, 2023 6:15:36 AM

Thank you!