How do I report hobby income if I don't have a 1099-k form?

1. Hobby Income Reporting:

   • Taxpayers who make money from a hobby must report that income on their tax return. Unlike a business, where the primary goal is to make a profit, hobbies are pursued for recreation or enjoyment.
   • If you engage in a hobby that generates income, you’ll need to include that income on your tax return. Report it on Line 8 (Other income) of Schedule 1 of Form 104012.

2. Business vs. Hobby Determination:

   • To determine whether your activity is a business or a hobby, consider these factors:
     • Profit Motive: Businesses operate to make a profit, while hobbies are for recreation.
     • Facts and Circumstances: Base your determination on all relevant facts and circumstances.
   • If your activity doesn’t aim to make a profit, the expenses associated with it become miscellaneous itemized deductions and can no longer be deducted. However, you still need to report the income on your tax return1.

3. Sole Proprietorship (Business Income):

   • If your hobby generates substantial income and you’re the sole proprietor (i.e., the only owner of an unincorporated business), you’ll report both income and expenses on Schedule C of Form 10402.

Remember to consult the relevant IRS publications (such as Publication 334, Publication 525, and Publication 535) for detailed information on handling hobby income and expenses

Thanks for the response.

 

I understand that I need to report this as income.  Let me clarify, I need to know how to do this through turbo tax.  Every time I attempt to report hobby income, it asks if I have a 1099-k.  When I reply "No", it won't let me add any of it.

 

Is there a way in turbo tax to add this if I don't have a 1099-k?

Try entering it under miscellaneous income.  There is an entry point for that as you get prompted for the various types of income.

You can report hobby income on Form 1040 Schedule 1 line 8 when the income is not considered to be self-employment.  

 

Here are the steps:

 

• Go to Wages and Income > Other Common Income > Income from Form 1099-NEC and click Start or Update
• Enter the details reported on your Form 1099-NEC
• Describe the reason you received the income
• On the screen titled 'Does one of these uncommon situations apply?', select the This is not money earned as an employee or self-employed individual, it is from a sporadic activity or a hobby choice 

 

The result is that the income is reported on Form 1040 Schedule 1 line 8z with the amount and description that you entered. 

 

If your spouse expects to continue to make money training dogs and the involvement progresses past being a hobby and needs to be reported as a self-employed business so that expenses may also be claimed, then enter the income and expenses on Schedule C.  

 

To learn more, take a look at the following TurboTax help article and an article from the IRS:

 

When the IRS Classifies Your Business as a Hobby

 

Here’s how to tell the difference between a hobby and a business for tax purposes

@burtaxes001 

Thanks, that was the ticket.  I should have just dug through all of the menu to find it.

 

Cheers!

To clarify….are we to tell Turbotax we have a 1099-NEC, then basically ignore all the NEC details it asks for, and just enter the hobby income?  I am in the same boat, no 1099-NEC or K,  1st time using turbotax, I have always reported my small ($50) yearly hobby income on Schedule 1, line Z, and just want to repeat same this year.  It does seem strange to say we have a document we don’t actually have to make this work.  Thanks to any clarification on this!

No.  You do not need to tell TurboTax you have a form you do not have.  Instead you will select the following to report your hobby income:

1. Federal
2. Income
3. Less Common Income
4. Miscellaneous Income, 1099-A, 1099-C
5. Hobby Income and expenses

Although it says hobby income and expenses, the expenses are not deductible on your federal return, but they may be on your state return.