Yes, she must file and it is taxable, regardless of how you treat it.
If it is a hobby, then she has unearned income. She must file Form 8615 and she can't take expenses. Hobby income is reported
To enter hobby income and please follow these steps:
- Sign in to your TurboTax account
- Click on Federal Taxes tab
- Choose Wages and Income
- Scroll down to Less Common Income and click Start to to right of Miscellaneous Income, 1099-A, 1099-C
- Click Start to right of Hobby income
If it is self-employment, she is over the $400 threshold.
Follow these steps to go to the Schedule C section of your return:
On the top right corner of TurboTax online screen, click on Search (or for CD/downloaded TurboTax locate the search box in the upper right corner).
- Type in “schedule c” (or for CD/downloaded TurboTax, click Find).
- Click on “Jump to schedule c”.
- Click on the blue “Jump to schedule c” link
Many people are engaged in hobby activities that are also a source of income. For example, some people started selling handmade items during the pandemic. These people must report this income on their tax return.
A hobby is any activity that a person pursues because they enjoy it and with no intention of making a profit. This differs from those that operate a business with the intention of making a profit.
In determining whether their activity is a business or hobby, taxpayers must consider nine factors. Hobby
