I was a Mary Kay consultant for about 6 or so months. I made over $1,500 but would not consider it a source of income, just a hobby. How do I file this, or do I need to?

[mchlljms]

Is there any specific place in Turbo Tax I can fill out to file for Mary Kay? I really just don't know what to do.

[MiriamF · Accepted solution]

Yes, you must file this income. Mary Kay will send you a Form 1099-MISC, which they also file with the IRS, so the IRS knows.

Because you earned money, the IRS will not regard this as a hobby. The hobby rules are invoked when you lose money, and then only if there are other circumstances (see below). Even if it was a hobby, you are not excused from reporting the income.

https://turbotax.intuit.com/tax-tools/tax-tips/Small-Business-Taxes/When-the-IRS-Classifies-Your-Bus...

[mchlljms]

Ok that makes sense. Will Mary Kay fill out the 1099-MISC before they send it and all I have to do is sign it? Is there any other paperwork I need to do in addition to the 1099-MISC? Is there a section in Turbo Tax to punch in my 1099-MISC?

[MiriamF]

There will be nothing to sign. As with a W-2, it just provides information you will need to enter on your tax return. Two helpful links are <a rel="nofollow" target="_blank" href="https://turbotax.intuit.com/tax-tools/tax-tips/General-Tax-Tips/How-to-File-Taxes-with-IRS-Form-1099...> and regarding how to enter the information in Turbotax, <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/replies/4409184">https://ttlc.intuit.com/replies/4409184</a>. Because you say you earned more than $400, you are required to file even if your other income puts you below the filing threshold.

[mchlljms]

Ok that makes sense. So basically my 1099-MISC is like a W-2?

[MiriamF]

Yup. Only, no tax will be taken out. This is why the feds are anxious for you to file - they want their share.

[mchlljms]

Ok, are there any other forms or receipts or anything I will need in addition to my 1099-MISC?

[MiriamF]

Mary Kay should give you some guidance about what expenses are deductible. Car expenses driving to clients' houses, travel expenses if you went to a convention...the big advantage of being paid on a 1099 is that you can deduct all your expenses before any tax is calculated. You should keep documentation about your expenses. If Mary Kay doesn't help, check <a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/i1040sc.pdf">https://www.irs.gov/pub/irs-pdf/i1040sc.pdf</a> .

[mchlljms]

Ok sounds good. Am I able to enter in all of that and my 1099 in Turbo Tax?

[MiriamF]

Yes, you can. With a 1099-MISC and expenses, you will need either the desktop version (<a rel="nofollow" target="_blank" href="https://turbotax.intuit.com/personal-taxes/cd-download/">https://turbotax.intuit.com/personal-taxes/...>) or the on-line version (<a rel="nofollow" target="_blank" href="https://turbotax.intuit.com/personal-taxes/compare/online/">https://turbotax.intuit.com/personal-tax...>). It doesn't matter which product you start with (I would start with Deluxe in the On-line version); TurboTax will prompt you to upgrade depending on your answers to the interview questions at the beginning.

[rfking162001]

according to the top of my "income advisory statement" Mary Kay will not send  you a 1099-MISC unless your wholesale purchases totaled more than $5,000 or you received $600 or more in commissions, prizes, or awards or you had any amount of income tax withheld during the tax year. I had none of those things but I still bought wholesale products and sold them for profit. What would I do in this situation? I read an article that as a consultant we should complete 1040 schedule C, form 8829, and form 1040 schedule SE. Any advise?

[MiriamF]

The article you read is correct. The IRS requires you to report self-employment income of $400 or more. You may be able to wipe out that income with your expenses, but you still need to report it, or the IRS will be more than happy to charge you tax on the full amount.

[ToddL99]

Report this as "Other reportable income"

• Type "other reportable income" in the search window (or in the Search Topic window for desktop versions) 

• Click on "jump to other reportable income"  (or "other reportable income" in the Search Topic results) 

• Answer "No" to "Did you receive any other wages?" 

• Select "Other reportable income" from the Miscellaneous income list 

• Select "Add another Income item"  on the Other Miscellaneous Income Summary screen 

• Enter a Description and amount,  then click on Continue 

The amount will be reported on line 8 of Schedule 1 (Form 1040).