Based on the IRS definition of a hobby, your income from your summer job isn't considered a hobby. The IRS defines a hobby as "any activity that a person pursues because they enjoy it and with no intention of making a profit". Refer to the IRS website Here’s how to tell the difference between a hobby and a business for tax purposes for more information.
You will have to report your income from Form 1099-NEC on Schedule C. The IRS considers this income as self-employment income. You don't have to name the business, you can use your name. The good thing is that you'll be able to deduct reasonable and customary business expenses from that income.
To report self-employment income, follow the steps below:
- Open TurboTax
- Select Wages and income
- Select Self-Employment Schedule C:1099-NEC
- Answer Yes on the next screen - Did you have any self-employment income or expenses?
- Answer the questions on each screen, when you get to the screen - Let's enter the income for your work, select the for
- Scroll through the screens to enter the information.
For additional information, refer to the TurboTax Help articles How to File Taxes with IRS Form 1099-NEC, Reporting Self-Employment Business Income and Deductions, and What self-employed expenses can I deduct?
You will have to pay self-employment (SE) Taxes (Social Security and Medicare) on your profit from your self-employment income. TurboTax calculates this for you.
However, you do get a deduction for a portion of your self-employment taxes that are calculated. The SE taxes and deduction are calculated on Schedule SE. For additional information, please see the TurboTax article Self-Employed Federal Income Taxes.
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