Retired, live in VA, sold $931 total value of homemade crafts at craft shows, rec'd a 1099-K

[jbthorstad]

We're retired, live in VA, and my my wife sold $931 (total value) of hand-made crafts at various craft shows during 2022.  She rec'd a 1099-K, because she offers craft show goers the option of paying with their debit and credit cards through "Square." She is not "self-employed," and her crafting consists primarily of embroidered hand towels, etc. We "plugged" the total amount of $1725.00 into our TurboTax Premiere software, but now we're being asked to complete a 1099-B Worksheet, and then there appears to be a section on the 1099-B regarding Form 8949 Reporting Exception Transactions, and a section for Form 8489 and schedule D Totals! My wife embroidered some hand towels and other hand-made items to sell at local craft shows, because it gives her something to do! We're more than happy to have to pay appropriate taxes due, but holy crap, this is way overly involved. Isn't there a simpler way to report this $1725 total on our return?

[DMarkM1 · Accepted solution]

Yes, this does not appear to be a personal sales issue.  Personal sales would be she acquired an item and then sold it. This sounds like your wife embroiders several items over time and then sells them a craft shows.  This would be hobby income.  You do not need to deal with a 1099B for that income.  

1. In the "Wages and Income" section
2. Go back to the "Investments" topic and delete any entries there for the craft income. 
3. Confirm  
4. Scroll to "Other Common Income" 
5. Revisit the 1099K topic.  
6. Edit the 1099K item if it is still there or Add a 1099K if needed.  
7. When asked about the type of income select "Hobby Income" under the Occasional Income category
8. Put in the form information and if the gross amount shown includes other personal items click that box and enter the personal amount included 

Now the hobby income will show on Schedule 1 line 8J which will flow to line 8 on the form 1040 and will not be subject to "Self-employment" taxes

[jbthorstad]

Thanks very much for the helpful information... most appreciated!