DianeW777
Employee Tax Expert

Self employed

It depends. If you performed a service for the township board and received compensation for your services it could be considered self employment. First review the information provided by the IRS.

 

Note: You can decide if it is hobby or business income.  This IRS link will help you: Business or Hobby?

 

Key elements:

  1. A hobby requires you to report the income you received and under the current tax law, Tax Cuts and Jobs Act (TCJA), no expenses are allowed to be used to reduce the money collected even if you itemize deductions.
  2. A business allows you to deduct the costs necessary to obtain the income.  The law explains that 'you must be engaged in the activity to produce a profit'.  The test under IRS tax law is that you must show a profit three out of every five consecutive years to be considered a business.

Business Income entry: This would allow any of your out of pocket expenses directly relating to the township board activity.

If you decide it's a hobby you can report it as follows, after your delete your Form 1099-NEC (keep it with your tax records): 

  • If you're using TurboTax Online software and need to delete a form, click here.
  • If you're using TurboTax Desktop software and need to delete a form, click here.

Other Miscellaneous Income:

  1. Go to the Wages and Income  section of TurboTax
  2. Scroll to  Less Common Income > Select  Miscellaneous Income, 1099-A, 1099-C
  3. Select Hobby Income and ExpenseEnter the income
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