Business Income or Loss in content page of articles
If you work for yourself -- either full-time or part-time -- report your income and expenses on Schedule C. Self-employment income includes income from side jobs and income reported to you on a Form 1099-MISC.
Since you're self-employed:
You can deduct your ordinary and necessary business expenses on Schedule C.
You get Social Security and Medicare coverage by paying self-employment tax. This applies if your net self-employment earnings are $400 or more.
The IRS presumes that if you make a profit for 3 out of the last 5 years, you’re engaged in an activity to make a profit. If so, you can deduct losses from the activity. However, if an activity isn't for profit, you can only deduct expenses up to the amount of your hobby income. Expenses more than the income are nondeductible losses. To learn more, see the Hobby Income tax tip.
The IRS considers these factors when deciding if your activity is a business or a hobby:
Manner that you conduct the activity
Expertise of you and your advisor
Time and effort you used to conduct the activity
Expectation that assets used in the activity might appreciate in value
Your success in conducting other similar or dissimilar activities
Your history of income or losses in regard to the activity
Amount of occasional profits you earned
Your financial status
If the activity has elements of personal pleasure or recreation
To learn more about business income and losses, see IRS Publication 334: Tax Guide for Small Business.