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YouTube/Google 1099 "Royalties" Sched E, C, or Other Income?
Hi. I have used TurboTax to report my MODEST YouTube "ad revenue" for multiple years and usually reported it as "Other Income" since it was hobby income. YouTube used to classify the income as 1099-MISC "Nonemployee compensation" in box 7. This apparently changed in 2021 and they now report it on a 1099-MISC in box 2 as "Royalties" and I was not aware of it until I got a notice about a 2022 tax form from them. I then saw there was one from 2021. Thus, I think I need to amend my 2021 return (if I need to use Sched E or C -- I don't think I need Sched C and see my reasoning below). And also, I will need to know how to report it on the 2022 taxes when I get around to doing them.
My YouTube is a hobby of mine. It is NOT my business . It has always been a hobby that was not for profit but some videos were monetized. Before, it always seemed to neatly fall under the category of "hobby income" and was reported as such but Google is now reporting it as ROYALTY income on a 1099-MISC.
My income is extremely modest nowadays.
In 2021 (the one I need to amend), the total "Royalties" on box 2 is $14.25.
For the new 2022 one, the amount is $41.10 ($30 of that being from just one month where one video was popular -- usually I make no more than a dollar a month from it!)
Previous years: 2020 approx $50
2019: unknown but very low.
I used to make more videos which made more revenue in 2018 and before:
2018: $143.91 Was reported on box 2 of a 1099-MISC as Nonemployee compensation
2017: approx $47
2016 (when I used to do it more) was approx $100~150 or so.
Anyway, since YouTube is reporting it NOW as box 2 Royalties, am I required to use Schedule E or Schedule C or can I continue reporting it as "Other Income" as I believe it to be a hobby?
(I've read the thing about 3/5 years posting a profit means you "might have a business" instead of a hobby, blah blah many times but always considered it to be a hobby since most of the videos I made would generate ZERO revenue due to YouTube's broken copyright system but that's a whole other story).
Just to me, it is a hobby. I do it for fun and not for money. If I get a few dollars, I take it.
I would prefer not to have to use Schedule C and make it "self employment income" as I really do not believe it to be that. I have a full-time job now (and in previous years was too or before that, I was a student doing it as a hobby in free-time).
I heard you can use Schedule E but most people don't see either way (E or C) fitting what YouTube is. The tax codes just don't have anything similar.
"Other Income" / hobby income is very close to what it is from when I used to research it online before this change on the 1099-MISC from Google.
(I also read the thing about if an author makes only one book and never publishes new editions or new books, his royalties are probably on Sched E and not a business. If he publishes many books, he probably has an "active business", and would report royalties on Sched C.)
However, I don't believe that YouTube/Google arbitrarily changing the way they report the income from nonemployee compensation to royalties should change the way I report the income (correct me if I am wrong). As the income is the EXACT SAME, just Google is reporting to to the IRS as royalties now (so they can make money on WORLDWIDE creator's revenue on ads served/watched in the United States instead of NEC.
Sorry for rambling but I want to know if I can continue reporting it as Other Income, or if I need to put it on Schedule E or C. (I really hope not to do Schedule C and make it a "business" that makes like a dollar or so a month nowadays). It really is my hobby. If anyone wants to see the channel it is www.youtube.com/@shanekpop
I only recently started making content frequently again in the form of YouTube Shorts (which were NOT ABLE TO MAKE MONEY until just the other day 2/1/2023 is when those became eligible for ad revenue)
Thank you.