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jgordosea
jgordosea, Enrolled Agent
Category: Tax
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Experience:  I've prepared all types of taxes since 1987.
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I worked a summer theatre part in 2007 and recieved a ...

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I worked a summer theatre part in 2007 and recieved a stipend. The theatre is a non profit and I did not participate in the activity for profit. This is NOT a regular or routine thing I do, not a hobby, and I am not necessarily "skilled". The theatre sent me a 1099MISC tax form as put an amount in box 7 as non employee compensation. I am using tax software and find this seriously impacts my return. I participated in 12 performances, had dozens of rehersals, and much mileage, and costume costs, to participate in this evening project (however I did NOT track these). I gather I must declare this somewhere, but not sure if 1) the theatre reported it correct, or 2) if I should be entering this data as another 'other income' elsewhere. Thanks ~ oh ya, I do have a good day job
Submitted: 6 years ago.
Category: Tax
Expert:  jgordosea replied 6 years ago.

Greetings,

Yes, that is probably the correct way for the earnings to be reported for the services you performed.

From your description this is not self employment income to be reported on Schedule C (with expenses deducted and the net profit subject to SE tax as well as income tax) but rather this is "hobby income" that is properly reported on line 21 as Other Income on 2007 Form 1040

See the article at http://www.irs.gov/newsroom/article/0,,id=172833,00.html Business or Hobby? for more. For tax purposes it is categorized as either a business (for profit, regular and continuous) or a hobby (not for profit, occassional or infrequent).

Hobby expenses are deductible only to the extent of hobby income and are other miscellaneous expenses you itemize on line 23 of Form 1040 Schedule A. Note that total miscellaneous deductions must come to more than 2 percent of your adjusted gross income before you can deduct them. Like any deduction the burden of proof is on the taxpayer in an examination for any amount listed in the tax return.

I hope this helps for reporting your hobby income and expenses.

Best wishes.

 

 

.

 

jgordosea, Enrolled Agent
Category: Tax
Satisfied Customers: 3002
Experience: I've prepared all types of taxes since 1987.
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