I earned about $1000 in 2006 by providing tutoring and related services to about 15 different people. I heard I can declare those $1000 in Schedule C. I understand that the other option is to use the Other Income section, perhaps the Hobby Income. My problem is that at this day, I do not have a business entity (such as a sole proprietorship). My question is: can I use Schedule C, despite the fact that I do not have a business entity? Your help is much appreciated.
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You provided services to people and received compensation. That's called business income and is reported on Schedule C. You don't need to do anything special (tax-wise) to establish a business, just earn income, so you are a sole proprietor in the eyes of the IRS. Your city or state may have other requirements for establishing a business, but the IRS will consider you a business and tax you accordingly.
You ARE a sole propriatorship without any formal announcing of it to anyone. Put your income and expenses on oSchedule C and then Schedule SE and don't spend what's left in one place (;>)
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