It depends. If this is income you do for profit, then it is considered self-employment. Income and expenses related to self-employment are reported on Schedule C. Net income from self employment are subject to self-employment taxes (Social Security and Medicare). On the other side, a genuine for-profit business venture that suffers a loss will reduce your taxable income in the year. Here is an FAQ on how to access Schedule C: https://ttlc.intuit.com/replies/3302122
On the other hand, if you do this work as a hobby (not-for-profit), the treatment is different. In this case, the income is reported on Line 21 as Other Income. When entered in this way, your income is not subject to Social Security and Medicare taxes, but your deductions are limited and may not reduce all of your hobby income from being taxable. If you are claiming a self-employment business that year after year is suffering loss, the IRS has recharacterized such ventures as hobbies and eliminated many of the deductions, which in turn results in increased tax.
Thus, the key is how the IRS considers the endeavor. Please click on the following link for a discussion on this subject: Business or Hobby? Answer Has Implications for Deductions | Internal ...
Many who are athletic officials are such because they enjoy sports, want to be involved, and don't mind the fact that they can make some money doing so. Those who do that are likely in a hobby. The official that is in the business of officiating is looking to profit from his or her activities, and generally does so, even though at times he or she has had a bad year financially in the process.
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