Your IRS form 1099-K reports the sales price of your art as well as your state sales tax that is remitted to the state. Report the sales tax as an amount that should not be included.
To report 1099-K Hobby income, follow these directions.
- Down the left side of the screen, click Federal.
- Down the left side of the screen, click Wages & Income.
- You may need to click Add more income.
- Scroll down to Other Common Income and click on the dropdown menu.
- Click Start to the right of Form 1099K.
- At the screen Did you get a 1099-K? click Yes.
- At the screen How would you like to upload your 1099-K? click Type it in myself.
- At the screen Which type of income is your 1099-K for?, select the button for Hobby income. Click Continue.
- At the screen Let’s get the info from your 1099-K, enter the information.
- Select This amount in box 1a is too high or includes some personal transactions. Enter the sales tax in the box Enter the amount that shouldn't be included.
- Click Continue.
- At the screen Your 1099-K summary, notice that the income relates to ‘Hobby’. Click Done.
The entry will be reported:
- on line 8j of Schedule 1 of the Federal 1040 tax return, and
- on line 8 of the Federal 1040 tax return.
Make sure that you keep records of all transactions. Later, you may need to demonstrate to the IRS that this is not taxable income.
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