Do I need to report this cash earned?

[elisaheine77]

I have a question regarding reporting cash earned. I was asked by a friend to help organize some files they have and do some documentation for a training they are hosting. This is not a regular occurrence and I am wondering if this cash earned is something I need to report to the IRS. I was looking at the Schedule C documentation and it mentioned that the Schedule C form is if:

• Primary purpose is for income / profit
• Involved in the activity with continuity / regularity

I am only helping them out twice, so it is not a regular occurrence and they would pay me less than $1000 total. I do not have a business of any kind and nor do I plan to. Does this need to be reported and if so how would I go about reporting?

Thanks.  

[tagteam]

From the description you provided, it appears as if the income would more properly be reported as Other (miscellaneous) income on Schedule 1, Line 8.

For example, a sporadic activity, not-for-profit activity, or a hobby does not qualify as a business. To report income from a nonbusiness activity, see the instructions for Schedule 1 (Form 1040), line 8.

See https://www.irs.gov/instructions/i1040sc

As a side note, you should ask your friend not to issue you a tax reporting statement or, if your friend intends to issue one, to issue a 1099-MISC. If your friend issues a 1099-NEC, and you report the income as "Other" (i.e., not subject to self-employment tax), there could be a matching problem when you file your return.

[elisaheine77]

Hi - Thank you very much for your response. I will not be issued any type of tax reporting statement from my friend. When reporting the cash under Schedule 1 (Form 1040) Line 8, will I need to provide any other documentation or receipts with it or just the cash amount I earned within the year for the sporadic odd job? 

Thanks!

[tagteam]

Simply report the total amount you received for your services. 

[elisaheine77]

Thank you so much for the help. One more question - this is for the federal return, but what would I need to do for the state return? Do I need to report it there as well? I live in Virginia and not sure how that works. 

[tagteam]

You should check the Virginia Department of Taxation web site.

https://www.tax.virginia.gov/forms

Typically, the Other Income that you report on your federal return is included as part of the adjusted gross income on your federal return which figure (your AGI) is then reported on your state return (i.e., it is not necessary to enter the other income separately on your state return).