USA Do I need to report under $400 income?


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Hello,

I am married, under 65, and unemployed. In 2017, I made some artwork for a small business that I sold for $50. I am getting conflicting information online about whether or not we need to report this on our taxes. Some say if it is a hobby, I need to report even if it was a $1. I don't necessarily consider it a hobby as I made the art with the intent to sell it. Another website said that if it is freelance or small business work, I only report if I made more than $400 income. I do not have a business license, so I'm not sure it this means the work is classified as freelance.

Do we need to report the $50, and if so, how should we do that? Thanks for your advice.
 
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Drmdcpa

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If you have a filing requirement, you are required to report all income, period.
 
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One must report any income, even if it is freelance work, to the IRS. If you make more than $400 a year than the IRS requires you to pay self employment taxes.
 
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Make sure you report all income on taxes because if the IRS find out about not filling income then they will come after you. They can audit you then fine you and if it is bad enough there might be jail time involved. Most of the time only fines though.
 
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Drmdcpa

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You are required to report all income. Whether it causes taxes (income, self employment or other) is a different story. The $400 limit refers to when self employment tax needs to be paid on self employed income. A net schedule C or line 21 income item is not subject to self employment tax if it is under $400, but it may still have income tax and other tax issues like NIIT.
 
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Any money that you make as work preformed and traded for money must be reported to the IRS. More than likely you will not be taxed for it being under a certain amount but all will need to be recorded. Especially in the case the IRs comes and audits you.
 
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Yes, all income must be reported on your tax return. The $400 threshold means that you will not be subject to SE taxes on the income. ... Taxpayers will also need to prepare Form 1040 Schedule SE for self-employment taxes if the net profit exceeds $400 for a year.
 

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