If you got a 1099-MISC from TIKTOK, INC. and have $ earned in Royalties, does that mean you are self employed?

[Critter-3]

No ... that means you have royalties to report on a Sch E ...  follow the screen instructions in that part of the income tab.  

[Carl]

Assuming you're talking about the same thing and the 1099-MISC has the income reported in box 2 of that form, you have royalty income that gets reported on SCH E. You are not self-employed.

[werty]

My daughter has the same situation: a 1099-Misc from TikTok with a small $ in box 2 (Royality).  TurboxTax asks her to choose whether to enter the income on Schedule C or Schedule E. If she chooses Schedule E, TurboTax thinks this is rental income and asks for property address. So it looks like she needs to choose schedule C, even though she does not have a business name or EIN. Is that correct?

[Critter-3]

NOOO ... 1099-misc box 2 can simply go to the Sch 1 line 8 and avoid the Sch E in this case ... DELETE the 1099-misc entry you made and follow this instead :  

• Down the left side of the screen, click Federal.
• In the center of the screen, click Income & expenses.
• On the screen Your income and expenses, scroll all the way down to the last section, Less Common Income.
• Click the Start or Update button for the last topic, Miscellaneous Income, 1099-A, 1099-C.
• On the next screen, Let's Work on Any Miscellaneous Income, scroll down and click the Start or Update button for the last topic, Other reportable income.
• The next screen asks, Did you receive any other taxable income. Click Yes.
• On the next screen, Other Taxable Income, enter a description and the amount. Click Continue.
• On the next screen click Done.

The income will be reported on Schedule 1 line 8 with the description that you entered

[werty]

Thank you so much for the detailed steps. I followed the steps to the screen "Other Taxable Income", on the screen, the first line says "Enter a brief description and amount ...", but the next line says "Do not enter income reported on Form 1099-MISC". I'm so confused. 

[ErnieS0]

Enter your daughter's TikTok income as Tax Champ @Critter-3 says. 1099-MISC income normally goes to the rental (Schedule E) or self-employment (Schedule C) forms because it is income from a business and has different rules.

That's why TurboTax says not to enter a 1099-MISC as Other Taxable Income.

Your daughter is probably not running a business on TikTok so it's "hobby" money. It's still taxable, but it's not a self-employed income. 

For description your can just say TikTok income and enter the amount. If you're worried about the 1099, you can say "1099-MISC from TikTok" so the IRS will know you reported the form.

[RibaMM]

I really hope you are correct. I am going to file my taxes based on this advice that you gave.

[DawnC]

Follow the instructions here to enter royalty income on a 1099-misc.   With your return open, search for 1099-MISC and select the Jump to link in the search results.

When you enter your 1099-MISC, enter the income in Box 2 - Royalties. On the following screen, choose the source of your royalty income:

• Investment income from property you own – This includes natural resources extracted from your property by a third party who leases your property, as well as royalties from intellectual property that you didn't create yourself. This gets reported on Schedule E.
• Royalty income from your business, including artist royalties or operating a natural resources business (Schedule C) – This includes income from natural resources that you extract from your property as well as royalty payments from intellectual property you created as an inventor, writer, artist, and so forth. This gets reported on Schedule C.

Once you've selected the proper classification, follow the onscreen instructions.   @RibaMM 

[RibaMM]

I do not believe that Schedule C or Schedule E are correct. This is hobby money from TikTok - there is no “business” here. I think Schedule 1, Line 8 seems most appropriate. Unfortunately, TurboTax specifically states not to report 1099-MISC income there, which is confusing.

[Vanessa A]

What are you doing to earn money on TikTok? Is there an intent to make money?  If there is no intent to make money, then you would enter your 1099-Misc as follows:

To enter the 1099 Misc as non-self-employment income take the following steps:

• Income
• 1099-MIsc under Other Common Income
• Enter the information from the 1099-MIsc
• Continue through and say the work does NOT involve work that is like your main job
• Select the years you received it
• Say no, to did this involve an intent to earn money

Business v. Hobby

[RibaMM]

Thanks. When I follow these steps (ie: go to Other Common Income and then the 1099-MISC section), it only gives me two options under “Source of 1099-MISC” after I enter the 1009 info. The first option is “Royalty investment income from a natural resource, intellectual propert or other investment portfolio)”. The second option is for Schedule C.

When I select the first option, it takes me to Schedule D.

Neither of those seem correct. I don’t meet the materiality test for this to be Schedule C income. Schedule D just sounds wrong as this is not an investment.

[JamesG1]

The steps outlined by @Vanessa A require that the income be reported in Box 3 at the screen Let's get the info from your 1099-MISC.

The income is reported on Schedule 1 line 8z.

The income is reported on IRS form 1004 line 8.

@RibaMM 

[RibaMM]

@JamesG1 The amount on my 1099 is in Box 2, Royalties. How should that be handled? I can’t seem to get a straight answer from anyone. TurboTax defaults to Schedule C or Schedule D, neither of which seem correct since this is a hobbt by my son, not a business.

[DianeW777]

It is reported exactly as @JamesG1 explained because it is a hobby as you indicated.  If this is your son's income it should be reported on your son's return if it is reported under his social security number (SSN).  If not, you can enter it on your return.

If your son is your dependent you can see the filing requirements here: Were you either age 65 or older or blind?

1. No. You must file a return if any of the following apply.
   1. Your unearned income was more than $1,250.
   2. Your earned income was more than $13,850.
   3. Your gross income was more than the larger of:  
      • $1,250, or 
      • Your earned income (up to $13,450) plus $400.

If your son is not your dependent he must file a return if his income is at least $13,850.

@RibaMM