@Patty581 wrote:
Yes the question is it is self employment and the Department of Revenue told me that you still have to have W-2's or a 1099 and the IRS said No not on self employment leaving me and anyone else confused.
It's not really about the forms. The form is supposed to follow the income, not the other way around. If an activity is earned income and the forms say it is not, there is a way to fix that, and if an activity is not earned but the forms say it is, there is a way to fix that, too. The form creates a presumption of the type of income, but the form does not control the type of income if the form is wrong.
The form is important if you are trying to receive tax benefits for having earned income. If you think an activity is "work", you have to report it to the IRS as work (even if the people you work for don't give you forms or give you different forms). And the type of form you receive may create an assumption at the IRS as to what kind of income it is. But the form or lack of form does not by itself prove the income was earned or unearned.
Earned income is compensation for performing a service (work) of some kind. There are two important considerations. Is the income compensation for services? And in the case of part-time or occasional side gig, it is work or a hobby? Even if something is compensation for services, it is not "work" (and therefore not earned income) unless there is some regularity about it. For example, if you mow your neighbor's lawn one time while they are on vacation, that is probably not earned income even if they pay you. If you regularly look for work mowing lawns, that is work and therefore earned income.
Here, for the original question asked in 2021, the question of whether doing online surveys should be treated as earned income depends on the regularity assumptions for deciding whether something is work or a hobby.
General definition of earned income
Earned Income
Earned income includes all of the following types of income.
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Wages, salaries, tips, and other taxable employee pay. Employee pay is earned income only if it is taxable. Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, isn't earned income. But there is an exception for nontaxable combat pay, which you can choose to include in earned income, as explained later in this chapter.
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Net earnings from self-employment.
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Gross income received as a statutory employee.
Wages, salaries, and tips reported in box 1 of Form(s) W-2.
Wages, salaries, and tips you receive for working are reported to you on Form W-2, in box 1. You should report these on Form 1040 or 1040-SR, line 1a.
Other types of earned income.
Other types of earned income not reported on Form W-2, in box 1, include household employee wages, tip income not reported to your employer, certain Medicaid waiver payments if you choose to include nontaxable payments in earned income for purposes of claiming the EIC, taxable dependent care benefits, employer provided adoption benefits from Form 8839, wages from Form 8919, and other earned income. You should report these on Form 1040 or 1040-SR, lines 1b through 1h.
How to tell if something is work or a hobby
https://www.irs.gov/newsroom/hobby-or-business-heres-what-to-know-about-that-side-hustle
