1) You can report as below. You will not be able to make adjustments.
You can add it as Other Income.
- I'll choose what I work on
- Less Common Income select Start (or Update) for
- Miscellaneous Income.
- Other reportable income and you can enter your own description(s) and amount(s).
2) There are probably not special instructions for IL like there are for MA. The amount will flow over from Federal to State.
3) You do not need to show proof. You can hold on to any receipts if you have them, but the IRS is familiar with this type of situation. If you continue to do this, you may want to set up a Schedule C so you only pay tax on the profit.
