How to enter freelance work under $600 with no 1099?

[aaciii]

My daughter (19) drive for DoorDash for a few months due in the summer because her waitress job was not available due to COVID.

She earned less than $600 so received no tax forms (1099) from DoorDash.

I cannot find how to enter this into TurboTax (I am using Premier).   If I say "self employed" it wants all manner of data about her business, Tax ID's for her "business," details on accounting methods, etc. which is insane. 

How can this be entered?

[DMarkM1]

You are in the correct place, the "Self-employment' topic.  You will be asked to enter some identifying information for the business, followed by the option to enter any income.

You can put in the business as a side job and call it a "Delivery Driver" business.  This will allow TurboTax to tailor the interview for that line of business.   

For the ID info.  You don't need a name or an EIN.  You can elect to use the taxpayer address as the business address.  Cash is normally the accounting method.  

In the follow on pages you will select "Other self-employed income which includes 1099K, cash, checks" as the income source.  Next you will enter the amount of income.

[aaciii]

Turbotax doesn't actually work that way...  there is no "side job" option...    can you be more specific as to EXACTLY where to enter this?

I am tempted to just say this is $500 of miscellaneous income and call it a day.   So frustrating.

Note, Turbotax ONLINE asks specific questions about "gig economy" work.   TurboTax desktop apparently does not and you have to figure it out on your own.   She's a kid delivering pizza...  not worth all this complexity of setting up "a business" etc.

[JohnW152]

Try simply entering the income straight into Schedule C, which is where self-employment income is reported.

Please see the TurboTax Help article What if I didn’t get a 1099-NEC or 1099-MISC, but made money from self-employment? for guidance in reporting this income.

If your daughter’s net self-employment income is $400 or more, she'll need to pay self-employment tax.  Schedule SE will generate automatically in TurboTax in that event.

[aaciii]

I think this is wrong.

if I enter the money as if she had received a 1099-NEC, which she would have if she had earned $600 -- then there are NO questions about self-employment at all in Turbotax and her tax liability is only $10. 

But since she only earned $545, she did not receive a 1099-NEC...  and TurboTax is then asking a million self-employment questions, AND creating a much larger tax liability ($77).   That's just not correct.  She owes 7 times as much because she earned less and DIDN'T get a 1099-NEC??

I am going to put it in as miscellaneous income...  rather than self employment income.  That results in the exact same tax liability ($10) as I get when I enter a "pretend" 1099-NEC.

[aaciii]

@JohnW152...   I don't believe all the self-employment guidance here is correct.  The IRS added a new form to report income on (1099-NEC) and it is specifcally for these situations.   They realized many many people are earning income from these side gigs but are not "self-employed" by any stretch.

When I enter my daughter's income on a "pretend" 1099-NEC its super simple.   No questons about self-employment, no questions about her having a "business" in her name -- just income reported, and done.

Since she only earned $545 she didn't get the actual 1099-NEC form - but that shouldnt trigger all this self-employment stuff unnecessarily.

[SamS1]

TurboTax is calculating self employment taxes on $545 at 15.3%.  Did she use her own vehicle?  She would be able to deduct miles driven at a 57.5 cents per mile.  Does DoorDash track the number of miles driven?  Could she generate a close estimate?  You might be able to get the taxable amount down to 0.00 or at a loss if you add her miles driven to the Sch C.  Did she have any other expenses?  Hot/Cold bags?  PPE?  All could be deducted against the DoorDash income on the Sch C and lower her tax bill.

The pandemic has affected your taxes in many ways. Including reporting in TurboTax the amount of stimulus money you received. Click Here for more information on how the Pandemic affected your 2020  taxes.

[aaciii]

agreed that's what going on -- but if she had received a 1099-NEC with $545 on it she would not owe self employment taxes.   So she should have made one more doordash run and she'd have gotten the form (you have to make at least $600 or DoorDash doesnt send one).

If she had a 1099-NEC form showing $545 she would not owe the 15% self-employment tax.    So I think Turbotax is incorrectly requiring her to do a full-blown self-employment setup.

I know this because if I say "yes, I received a 1099-NEC" and I put $545 on it...  then she owes no SE tax.

[SamS1]

The $545 needs to be reported on her return,  Granted if you are using Premier now, you would need to upgrade to Self-Employed to enter expenses against her Business income  on the Sch C.  I am not sure the increase in TurboTax fees will justify the amount of tax savings you might realize from adding expenses.  Adding it to Miscellaneous income might be the best route.  The income will get reported and you can continue in Premier without having to upgrade.

• Select Federal Taxes, Wages & Income, I'll Choose What to Work On
• Scroll to Less Common Income, and select Miscellaneous Income, 1099-A, 1099-C
• Select Other Income not already reported on For W-2 or for 1099
• Select Yes
• Continue until you see Any Other Earned Income, and select yes, now on the next screen select other
• Complete the information