1099-K

Hello Dr Rose,

 

Income from the 1099-K can be reported in 2 places.

 

1. Report it as other income on schedule 1 of your return if it is a hobby and no expenses are allowed to be taken

2. Report it on schedule C (self employed income) if it is a business and then you can take all the expenses associated with making that income.

 

Here are a couple of links with more information

https://turbotax.intuit.com/tax-tips/self-employment-taxes/4-tax-tips-for-money-making-hobbies/L89qz1GNj

https://turbotax.intuit.com/tax-tips/small-business-taxes/when-the-irs-classifies-your-business-as-a-hobby/L5NClTTtK

https://turbotax.intuit.com/tax-tips/self-employment-taxes/beginners-tax-guide-for-the-self-employed/L2HLojrj5

I paint portraits of pets and sell them.   Now I’m being told by your experts that I’m actually self-employed. I consider it a hobby.  Aren’t there more applicable requirements/criteria for being considered self-employed??

For it to be considered a business the IRS looks for the following

The IRS expects that if you start a business, you intend to make money at it. If you don't, your business might be a hobby. To determine if your business is a hobby, the IRS looks at numerous factors, including the following:

• Do you put in the necessary time and effort to turn a profit?
• Have you made a profit in this activity in the past, or can you expect to make one in the future?
• Do you have the necessary knowledge to succeed in this field?
• Do you depend on income from this activity?
• Are your losses beyond your control?

These are just some considerations that may, or may not, apply in determining if you have a business or a hobby in the eyes of the IRS.

 

If it is a hobby no expenses are allowed to be taken againist the income