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jtknrhut
Do I claim this income as hobby or business?
I have done a little software development work on the side. I really enjoy writing software, and because I write less and less for my job, I feel enthusiastic about writing for pleasure, plus working on different types of development is enjoyable. I have roughly brought in $15k (~270 hours of work). I have no deductions as I did this from my home using my laptop. Also this is the first year that I have done this.
I used H&R block tax estimator calculator. I put in my regular job information plus this income as a hobby and I get back money. When I put the same numbers in as a business I owe.
It is self-employment income. The main issue is whether you are trying to make a profit through your work, which is a goal of businesses but typically not of hobbyists. So, if someone asked you to code for free, would you do it? Have you done it? These are the things the IRS will look at in determining if you have a hobby or a business.
If it is a business, you owe self-employement tax (15.3% for social security and medicare). If it is a hobby, you don't owe that tax... that's why you get a refund if it's hobby income and owe taxes if it is self-employement income.
I hope that helps.
daoco
Sounds like a business to me. The fact that you enjoy writing code doesn't change the fact that it's an activity engaged in for profit. As far as the IRS is concerned if it loses money they call it a hobby. If it makes money they call it a business.
wartz
This sounds like a business. I can't imagine doing recreational software development. People may try raising horses or racing cars on weekends and call a hobby a business but just enjoying what you do doesn't make it a hobby.
boohoo_Jebus
If you're making money off of it, it's not a hobby. I'd call it a 'self-employed business',and so will the IRS.
Wayne Z
If your intent was to make a profit doing it, it is a business.
Report the income on Schedule C and Schedule SE.
avinash s
i think you should show ur income as if u were a independent contractor to the person who asked u to work.he issues 1099misc and just file the doc.
thanks.
recycle b
By definition it can not be a hobby since you are making a profit. You need to file a Form 1040 along with Schedule C for your BUSINESS and Schedule SE for your self-employment tax.
Jen M
You really need to contact a CPA for that information. I would want someone who REALLY knew the tax code for that one.
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