Was the this 1099K for Hobby Income, Self-Employment Income or Sale of Personal Items?
It depends on why your received the income here are the different ways to account income and expenses (cost of goods sold) depending on the type of income on the 1099-K
Here are the ways to report different types of income using TurboTax:
Self-Employment Income:
- If you received a 1099-K for self-employment income, you can enter it in TurboTax by navigating to the self-employed income section. Follow the steps outlined in this TurboTax support article.
Hobby Income:
- If you received a 1099-K for hobby income, you can report it as hobby income. Detailed instructions can be found in this TurboTax support article.
Sale of Personal Items:
- If you received a 1099-K for the sale of personal items, you can report it as personal item sales. Follow the steps in this TurboTax support article.
Important Notes:
Hobby Income:
- Unfortunately, the IRS does not allow you to deduct expenses from hobby income. Hobby income is considered money made incidentally from activities you enjoy, and since you're not considered self-employed, you can't deduct related expenses.
Sale of Personal Items:
- For the sale of personal items, you can report the income and offset it with the cost of the items sold. If you sold an item for less than its original purchase price, you can't use the loss to offset other income. However, if you sold it for more, you need to report the gain as taxable income.
