Self-employment tax

[taxgirl]

I have a client who operates a successful bookkeeping business netting approximately $30,000. On the side, during the summer she gardens for people netting approx $5000. It was originally intended to be a business but then the bookkeeping took off. Yes there are records kept, somewhat. Nothing is increasing in value and clearly it is not the main source of income. I'm trying to avoid self-employment tax on the 5000 and want to put the amount on line 21. There was a 1099 for $1200 issued. Expenses are 500 including mileage that wouldn't come in to play on schedule A. What would you do?

[spanel]

I have a client who operates a successful bookkeeping business netting approximately $30,000. On the side, during the summer she gardens for people netting approx $5000. It was originally intended to be a business but then the bookkeeping took off. Yes there are records kept, somewhat. Nothing is increasing in value and clearly it is not the main source of income. I'm trying to avoid self-employment tax on the 5000 and want to put the amount on line 21. There was a 1099 for $1200 issued. Expenses are 500 including mileage that wouldn't come in to play on schedule A. What would you do?

Clearly she works for that income... It has to be Sch C income

Chris

[TAXNJ]

As a

As a preparer ask questions to client, is it a business or hobby, and read Reg. Sec. 1.183-2(b)

[Burke]

Clearly she works for that income... It has to be Sch C income

Chris

And any expenses including mileage would go on that form. Use Sche C-EZ. You cannot put it on Line 21.