Okay, thanks for your response Kris. I have another concern I want to ask.
Can you also please guide me which option is better and safer to use, hobby vs self-employment ? Overall, I want to prioritize the correctness of my tax return, and I'm not that much concerned about which option (hobby vs self-employment) results in lesser tax. It's not that much money anyway, and I just don't want to get audited 😄
Even though I think of this as more of a hobby in my head, I thought of two reasons why declaring it as self-employment income might be better ?:
1) Although 2023 was the first year of me selling this app on Apple's App Store, I plan to keep selling this app for the foreseeable future. I read somewhere that if I report an income as a 'hobby' for multiple years, it might look suspicious to IRS ? If this is true, is it safer to declare it as 'self-employment' income ?
2) I've also mentioned earlier that Apple doesn't tell me the exact gross sales amount that customers were charged for my app is 2023. The $182 I'm told is an approximate number, which I don't feel comfortable mentioning since the actual gross sales amount might be slightly higher or lower. But based on what you said, if I declare the income as self-employment, then I don't have to mention the $182 anywhere right, and I can just mention the exact proceeds amount that I actually received, namely $127.30 ? If yes, then perhaps this is another reason to declare as self-employment instead of hobby ?
Please share your thoughts.
