1099-NEC Sporadic Activity

[gsamfoster]

I am retired and do not currently operate a business.  For the first 5 years after retirement as a professional, I created a S-Corp and conducted a few small service jobs.  My income never amounted to more than $3000 per year and I submitted an Income Tax filing as a S-Corp.  About 3 years ago, I dissolved my company and have not done any work since.  I have no business plan and do not seek work of any kind.  Last summer (2023) I was called by a very small non-profit in my town and asked to fill in a position while they hired a replacement employee.  I did so and worked a few hours per week for about 1-1/2 months as a non-employee.   I was paid for that work and it amounted to $2100.  The non-profit filed the payment on a 1099-NEC. 

I am not sure what to do.  I don't mind paying taxes on it but I certainly don't want to create a new business just to be able to report this one-time, sporadic work.  I don't mind completing a Schedule C but I do not own a Sole Proprietorship.  Also I don't have a Principal Business Code.

Please advise me on how to hand reporting this income from a truly Sporadic Activity.

[MinhT1 · Accepted solution]

Income reported in box 1 of form 1099-NEC is self-employed income. You are considered ‌self-employed and in IRS terms, are operating a business doing what you do to earn the income reported on the form 1099-NEC. You enter your form 1099-NEC in TurboTax and TurboTax will populate a Schedule C after you enter all your information. You can deduct any expenses you paid related to this activity (such as supplies, car expenses, etc.)

Self-employed income is subject to income tax AND self-employment tax (calculated at 15.3% on 92.35% of net self-employed income).

You don't own a business in the common meaning of the word. So in TurboTax answer that you use the cash method, that you don't have an EIN. You use your own name as the business name and your personal address as the business address. You can use 999999 as your business code.

You’ll need to use TurboTax Deluxe (or TurboTax Self-Employed if you have expenses to deduct), or any version of TurboTax (CD/Download).

You can read this TurboTax article for more information.

[gsamfoster · Accepted solution]

Thank you so much for your concise and very useful reply!  I followed up and used your information to complete my taxes.  The submitted taxes went through fine, so I think you nailed it!  The only part that didn't work "as suggested" was that I had to use 999000 instead of your suggested 999999 for my business code.  Then it worked fine.  

Thank you very much.