Do I need to Report Business income under $500.00?

[josias_leonardo]

Two part question: My husband works full-time, and I do photography on the side as a hobbyist. I registered myself as a business because people occasionally payed me for my services. I was only paid a total of $477.00 throughout the year. My husband and I are filing jointly. Do I need to report this as income?

I purchased well over $5000.00 worth of supplies and equipment as a hobbyist. If I do report the amount above as income, then can I use my expenses against that amount? Lots of what was purchased was used directly in my photography. Any help would be appreciated.

[tagteam]

Yes, you must report the $477 as income even if you do not receive any kind of tax reporting statement.

Further, beginning in 2018, the IRS does not allow you to deduct hobby expenses from hobby income. You must claim all hobby income and are not permitted to reduce that income by any expenses.

See https://turbotax.intuit.com/tax-tips/self-employment-taxes/4-tax-tips-for-money-making-hobbies/L89qz...

[Carl]

If you have more than $400 of self-employment income, then you are required to report it on  your taxes. You'll file a SCH C with your personal 1040 tax return to report the income. At worst, you'll pay taxes on the amount over $400. (Medicare and Social Security, at least.)

If you claim it all as hobby income, then you can not deduct "any" expenses against it, and depending on your standard deduction you'll pay full taxes on every penny of that income.

Were I in your shoes, if your income puts you in the 12% or higher tax bracket, I wouldn't bother with a SCH C for such a little amount of self employment income. I'd just report it as hobby income to keep things simple and be done with it.