A 1099-NEC is the definition of self employment. Contract work is considered as 'independent contractor' as opposed to an employee. As a business you can deduct any expenses that directly relate to earning this money. As a hobby no expenses will be allowed.
You can decide if it is hobby or business income. This IRS link will help you: Business or Hobby?
Key elements:
- A hobby requires you to report the income you received and under the current tax law, Tax Cuts and Jobs Act (TCJA), no expenses are allowed to be used to reduce the money collected even if you itemize deductions.
- A business allows you to deduct the costs necessary to obtain the income. The law explains that 'you must be engaged in the activity to produce a profit'. The test under IRS tax law is that you must show a profit three out of every five consecutive years to be considered a business.
Once you decide what type of income this is you can use the link below to see how to report.
Other Miscellaneous Income: Hobby Income
- Go to the Wages and Income section of TurboTax
- Scroll to Less Common Income > Select Miscellaneous Income, 1099-A, 1099-C
- Select Hobby Income and Expense > Enter the income
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