Don’t get overly concerned by the test questions—the program asks them to try to determine whether 1099 income is self-employment income or miscellaneous other income. Those questions are suggested by IRS documents but are not the only way of determining intent. Since you know this 1099 income is self-employment, just answer the questions in that direction. In other words, yes it was intended to earn a profit, yes it was similar to her other job, yes she worked for the same client before. You just want TurboTax to create a schedule C, and these test questions help the program decide whether or not to do that. The answers aren’t binding or forwarded to the IRS.
