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DR ROSE
Returning Member

1099-K

What form do we use to report the 1099K income when we file our taxes?

Does it have an area to list cost of goods and other expenses like packaging, postage, supplies etc

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3 Replies
John-H2021
Employee Tax Expert

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/L89qz...

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

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

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1099-K

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??

John-H2021
Employee Tax Expert

1099-K

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

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