>Unless they are in the improvements business, they don't need to have a
> >Schedule C and pay SE tax. Just put it on the 1040 under misc income. >
> But how do they deduct the cost of materials from the $6K if
> they do not file a Schedule C?
Then they should file a Schedule C. Initially I thought they hired a contractor whose cost of labor and materials was 6k, so they would just report their 6k as Other Income. But if they bought 3k of materials, and hired a contractor to do 2k of work, and themselves did
1k of work, then they should use a Schedule C which will end up showing a profit of 1k, and SS and federal and state tax only on this 1k.