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Other Income or Self-Employment??

Another question to the group; and thank you for your help so far.

I'm trying to figure out when money I earn can b placed in other income, and when I have to consider myself self-employed.

I'm helping out a few friends with their yards, mowing, taking down a couple of trees. They have given me a few hundred dollars as payment. I was thinking it was proper to just put this on line 21 of the 1040 as other income.

On the other hand, is it really necessary to claim this as self employment income, and pay the appropriate social security taxes on it? If so, I can then deduct all of my expenses, mileage, etc, correct?

Again, thanks for your opinions and help.

Reply to
Drew27410
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This sounds right to me. The instructions for Line 21 say to include here "Income from an activity not engaged in for profit. See Pub.

535.". Pub 535 is not very helpful, but the following link is:

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Deductions are allowed, but except for personal deductions (home mortgage interest, property taxes) they can be no more than your profit. Furthermore the deductions are taken on Schedule A, subject to the 2% of AGI limit -- only deductions above 2% of your AGI are deductible. The good news is that you put all the misc expenses -- including those for your job here, tax preparation fees, fees you pay people to manage your money to generate taxable income, un-reimbursed employee expenses, certain attorney fees, etc -- add them up, and then apply the 2% rule. And remember, the deduction is not allowed under AMT.

Yes, but see the limits above.

Your honesty is good. I imagine most people would have considered this amount as a gift from friends and not reported anything.

Reply to
removeps-groups

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