Asking for a business code means that the software wants the income reported as self-employment income on Schedule C Profit or Loss from Business. This income would be subject to self-employment tax as well as income tax.
Income not subject to self-employment may be entered as follows:
- Go to Federal / Wages & Income / Other Common income / Form 1099-NEC.
- At the screen Describe the reason for this 1099-NEC, enter the reason for this income.
- At the screen Does one of these uncommon situations apply?, select This is not money earned as an employee or self-employed individual, it is from a sporadic activity or hobby.
The entry will be reported:
- on line 8z of Schedule 1 of the Federal 1040 tax return, and
- on line 8 of the Federal 1040 tax return.
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