[Nick]

This is a great place. Thanks in advance for any help.

I usually file a 1040A jointly with my wife and I find it to be pretty straightforward. This past year, however, I provided Web space to a moderately big site. It's pretty informal - I don't have invoices or anything like that - but the site asked me to complete a W-9.

Now I have a 1099-MISC with $1037 in Box 7, Nonemployee compensation.

1) Where do I report this on Form 1040A or 1040?

2) Is this considered self-employment income? This is a hobby for me and I only rent out space to one site. I do not manage the server. I pay for Web space for my site, but I have more space than I need so I resell some of it to this other site. I don't consider it a business at all. It's more like, "I don't use my car on the weekends, so you can use it if you give me twenty bucks and fill up the tank."

If I include this income, I think I will owe something like $200 more in payments than I otherwise would, so this kind of stinks. Loaning out my car wouldn't call for a 1099-MISC.

[AtlantaTaxExpert]

Nick:

Sorry, but that's not how the IRS looks at it. The 1099-MISC dictates that you have to file Form 1040 with a Schedule C or C-EZ.

You can also pro-rate your costs to rent the server space and claim that as an expense on the Schedule C/C-EZ. If you think about it, I am sure you can come up with some other legitimate expenses to offset some of that $1,037.

BTW, loaning out the car for $20 a weekend would be considered a business if your friend generated a 1099-MISC for $1,040 ($20 x 52 weekends).

[Nick]

Thanks for the fast reply. Schedule C, here I come!