How do I report hobby income if I don't have a 1099-k form?

Forum|Forum|2 years ago
April 6, 2024
2 replies
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My spouse makes a little money on the side training dogs. This money is not needed for us to get by. Because she deals directly with customers, there is no company to give her a 1099-K. How do I report this income?

TurboTax Free Edition Online

Best answer by slotef

Try entering it under miscellaneous income. There is an entry point for that as you get prompted for the various types of income.

pongowongo

Hobby Income Reporting:
- Taxpayers who make money from a hobby must report that income on their tax return. Unlike a business, where the primary goal is to make a profit, hobbies are pursued for recreation or enjoyment.
- If you engage in a hobby that generates income, you’ll need to include that income on your tax return. Report it on Line 8 (Other income) of Schedule 1 of Form 10401 2.
Business vs. Hobby Determination:
- To determine whether your activity is a business or a hobby, consider these factors:
  - Profit Motive: Businesses operate to make a profit, while hobbies are for recreation.
  - Facts and Circumstances: Base your determination on all relevant facts and circumstances.
- If your activity doesn’t aim to make a profit, the expenses associated with it become miscellaneous itemized deductions and can no longer be deducted. However, you still need to report the income on your tax return 1.
Sole Proprietorship (Business Income):
- If your hobby generates substantial income and you’re the sole proprietor (i.e., the only owner of an unincorporated business), you’ll report both income and expenses on Schedule C of Form 10402.

Remember to consult the relevant IRS publications (such as Publication 334, Publication 525, and Publication 535) for detailed information on handling hobby income and expenses

burtaxes001Author

Thanks for the response.

I understand that I need to report this as income. Let me clarify, I need to know how to do this through turbo tax. Every time I attempt to report hobby income, it asks if I have a 1099-k. When I reply "No", it won't let me add any of it.

Is there a way in turbo tax to add this if I don't have a 1099-k?

AnnetteB6

You can report hobby income on Form 1040 Schedule 1 line 8 when the income is not considered to be self-employment.

Here are the steps:

Go to Wages and Income > Other Common Income > Income from Form 1099-NEC and click Start or Update
Enter the details reported on your Form 1099-NEC
Describe the reason you received the income
On the screen titled 'Does one of these uncommon situations apply?', select the This is not money earned as an employee or self-employed individual, it is from a sporadic activity or a hobby choice

The result is that the income is reported on Form 1040 Schedule 1 line 8z with the amount and description that you entered.

If your spouse expects to continue to make money training dogs and the involvement progresses past being a hobby and needs to be reported as a self-employed business so that expenses may also be claimed, then enter the income and expenses on Schedule C.

To learn more, take a look at the following TurboTax help article and an article from the IRS:

When the IRS Classifies Your Business as a Hobby

Here’s how to tell the difference between a hobby and a business for tax purposes

@burtaxes001

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