Form 1099-MISC and Schedule C

[taxea]

What is hobby and what is self-employment? I have on occasion put 1099-Misc income on Form 1040 Line 21 (not subject to SE) with the note of "1099-Misc Hobby Income". Haven't had one of these audited yet, but the dollar amounts have been pretty low. One client in particular I believe has been 4 years running, about $1500 of 1099-Misc [some position at her church]. The first year I went over the hobby vs. self-employment checklist and we agreed on hobby.

Bill

Bill this sounds regularity or constantly to me. How much are the client's expenses? Does he have an intent to make a profit? I would put it on a Sch C without have any other facts.

[KC-CPA]

Does anyone have 1099-Misc on Schedule C and no expenses? this is a sheetrocker and he states he has no expenses - makes think he is really an employee, the contractor provides truck and tools. My concern is EIC, $5,000 of Earned income and no expenses,but I actually think he really doesn't have many expenses.

[Jiggers]

It could belong on Schedule F.

[taxea]

How about this situation. Client has a 1099 MISC box 7 for Strike benefits. I have not seen this before but there is another client in our office with the same thing. One of them told me that they were told it would help them out for tax purposes. Both have over $9000 on the 1099's. Would it count as a business income or a hobby income?

They go on line 21 linked to line 7 because they are in lieu of salary.

What would you say if your hobby income note came with a 35K 1099? I believe it depends on how consistant the work is and what it is. It isn't the amount that determines Sch C. Clients often have no idea that they are engaging in a "business". The TP that works for the contractor is an IC. The contractor provides all materials.....not unusual....this is a Sch C and if he travels from his home he might have mileage, tools or other expenses. Sporatically is different than one time. He works whenever he gets called to do a job. Probably by choice. What's his age? Does he get a W-2 from elsewhere. Sometimes we just have to reason these issues out.

[Justataxguy]

We are reporting on Line 21 Other Income. No SE Tax. I have never had a union report benefits this way before and thought that it was unusual.

Many years ago (in the 70's and again in the 80's) I received strike pay for many months of a couple LONG strikes and we were told it was nontaxable as it was one the benefits we paid for with union dues.

But that was then, this is now, so who knows? Maybe those in office figure it's another way to raise revenue. I better stop before I really get started.

[S T]

From Pub 17

Strike and lockout benefits. Benefits paid to you by a union as strike or lockout benefits, including both cash and the fair market value of other property, are usually included in your income as compensation. You can exclude these benefits from your income only when the facts clearly show that the union intended them as gifts to you.

from Pub 525 - page 33

Strike and lockout benefits. Benefits paid to you by a union as strike or lockout benefits, including both cash and the fair market value of other property, usually are included in your income as compensation. You can exclude these benefits from your income only when the facts clearly show that the union intended them as gifts to you.

Line 21 - not subject to SE?

Seems I did this about 8 years ago with the Retail Clerks Union Strike

Sandy