(1) If the activity is considered hobby income, the gross proceeds of $200 is taxable and reportable but no self-employment tax is due. In addition, no expenses are allowed to be reported against the hobby income. See here.
In TurboTax Online, post hobby income as follows:
- Down the left side of the screen, click Federal.
- Down the left side of the screen, click Wages & Income.
- Scroll down to Less Common Income and click on the dropdown menu.
- To the right of Miscellaneous Income, 1099-A, 1099-C, click the Start / Revisit button.
- To the right of Other reportable income, click the Start / Revisit button.
- At the screen Any Other Taxable Income, click Yes.
- At the screen Other Taxable Income, enter a description and the amount.
- Click Continue.
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.
(2) IRS form 1099-K is a reporting form and the information is transferred to forms within the Federal income tax return. Think of a W-2 which reports income but the income information is transferred to other forms within the tax return. The $200 gross proceeds is below the 2023 IRS form 1099-K reporting requirements but the income is taxable and reportable.
If you are a U.S. citizen or resident alien, the IRS states that you are subject to tax on worldwide income from all sources and must report all taxable income and pay taxes.
(3) If you report self-employment income, you report $200 gross income and $50 expenses equals $150 taxable income and income subject to self-employment tax.
If you report hobby income, you report $200 taxable income.
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