Question

Aiko enjoys painting in her free time. She recently started selling her artwork to friends and family, purely as a hobby and not to make a profit. How is the income from this activity reported on her tax return?
She does not report the income since it is not considered a for-profit business.
She will report the income in excess of expenses on Schedule 1 (Form 1040), Part I, line 8z.
She will report the income on Schedule 1 (Form 1040), Part I, line 8j. The income won’t be subject to self-employment tax.
She will report the income as gross income on Part I of Schedule C (Form 1040).

Answer 1

She reports it as other income on Schedule 1 (Form 1040), Part I (the "Other income" line) and it is not subject to self‑employment tax. If the activity later becomes a for‑profit business she would instead use Schedule C.