How to enter 1099-NEC amount (Amazon Vine) as Hobby Income

c_1
c_1 Member Posts: 2 Newcomer
edited February 20 in Filing my taxes

  • I want to report this income as Hobby income (per Form 1099-NEC instructions, 3rd paragraph). However if I enter in the section specifically requesting 1099 info, I am forced to fill out a Schedule C and go the business route.
  • If I do not use the 1099 section, and use Other Income, there is a Hobby Income option, but no way to indicate 1099-NEC.
  • The other way I've found is to also use Other Income, but select Miscellaneous Income instead of Hobby. There I can specify 1099-NEC in the Income Description box.
  • The first option forces a Schedule C/business income.
  • The second does not reference any 1099 form, possibly flagging (presumed) unreported 1099 income.
  • So is the third option (Misc. Income) the proper way to go in this instance?

Please help.

Thanks in advance

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Answers

  • Taylor
    Taylor FreeTaxUSA Agent Posts: 71 image
    edited February 21

    Hello c_1,

    If you have determined this income is Hobby Income, it is typically reported under "Other Income" and not subject to self employment taxes. You would typically only enter the amount on the Hobby Income line, not the form name.

    When entered under the Other Income > Hobby Income line, it is reported on the IRS form 1040 Schedule 1, line 8j: Activity not engaged in for profit income.

    The IRS form instructions on Publication 525 state the following:

    "Activity not for profit. You must include on your return income from an activity, even if you don't expect to make a profit from that activity. An example of this type of activity is a hobby or a farm you operate mostly for recreation and pleasure. Enter this income on Schedule 1 (Form 1040), line 8j."

    This can be located on page 32, middle column under Other Income:
    https://www.irs.gov/pub/irs-pdf/p525.pdf

    If you need guidelines to help you determine if it is considered Hobby Income:

    https://www.irs.gov/faqs/small-business-self-employed-other-business/income-expenses/income-expenses

  • c_1
    c_1 Member Posts: 2 Newcomer
    edited February 21

    Yes, agree that reporting under Hobby income results in values to populate in 1040 Sch.1, line 8j, the correct place for hobby income; and MISC income ends up on line 8z. The concern is with the existence of the 1099-NEC. Without being able to indicate that line 8j is from a 1099-NEC, won't the IRS treat the 1099-NEC income as separate, and has not been reported? Unlikely that they will presume line 8j is from the 1099-NEC just because the amounts are the same.

    1099-NEC instructions, 3rd paragraph:

    "If you are not an employee but the amount in box 1 is not self-employment (SE) income (for example, it is income from a sporadic activity or a hobby), report the amount shown in box 1 on the “Other income” line (on Schedule 1 (Form 1040))".

    And that happens to be line 8z, on Schedule 1 (Form 1040). The same line that gets populated if entering as Miscellaneous Income, not Hobby Income.

    Miscellaneous Income does mention bartering, which may apply to Amazon Vine, but that still brings up SE/business/Schedule C as well as 1099-B. Amazon should probably use a 1099-MISC instead, but that's another discussion.

    Amazon and IRS sure know how to make things clear as mud.

    So I guess the question is how to report 1099-NEC income NOT as self-employment/business income, and still acknowledge it's from a 1099-NEC?

    What have you other Viners done? I know many have gone the Hobby income route, but how (specifically) did you go about it?

  • GeorgeM
    GeorgeM FreeTaxUSA Agent Posts: 86 image
    Hello c_1

    Because it appears you have taken the position that the 1099-NEC you received is not self-employment income but rather is probably characterized as “other income,” you might consider including in your brief description the term “1099-NEC.” Without including the term “1099-NEC” there is no other way in our Other Income section to specifically identify that the reported income is from a 1099-NEC.

    Generally, with Form 1099-NEC, we instruct taxpayers to report the income as self-employment income, but we understand our customers have the discretion to report such income as they deem appropriate given their circumstances.

    To report the income on your 1099-NEC as other income, select the Income tab, and in the drop-down, select the option for Other Income. On the Other Income screen, scroll down to the bottom and select “Yes” under the category Miscellaneous Income. Thereafter, enter your description and the amount received.

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