Hopefully a simple question…
I was expecting to put the fee totals for this under “hobby income” but now see also a “personal property rental” line. Which should I be using?
The lease/use fee is nominal (relatively speaking, <$2k/year), clearly not a for-profit/business endeavor. I was not planning to itemize deductions or list expenses associated to my horse (I have never itemized deductions before).
If you’re in the US, the IRS did away with your hobby deductions several years ago unless you itemize on sch A. Standard deduction is 12550 for single and 25100 for joint return so that’s a huge bar to clear.
I am not a CPA or Tax Accountant… but… all income that is not reported to the IRS by a W2 or 1099 is considered self-employment income (and in addition income tax that amount is subject to the self-employment tax rate is 15.3%)
(some people do not report unreported income. Some such as garage sale or what would be considered small amounts and not of interest to the IRS (currently), To this day I have never understood the Gov’s position on minor amounts such as Air Line Rewards being not taxable… it was very common for me to get thousands of dollars of value each year and all was traceable be ignored But once you report money earned but not on 1099 or W2 you might be ted flagged if you do not have such in following filings)
I have our accountant who is a CPA handle my business income and just use the standard home office deduction which pretty much offsets my these days small consulting income. I have several clients who are billed less than $600 annually so they do not issue a 1099
there is no such thing as a simple question when it comes to filing income tax these days. You question is best addressed by a tax advisor / CPA who is up on the latest and ever changing rules and laws.
yes the good old tax code… very simple to understand, you have their money and they want it all
The Government Printing Office sells it spread over two volumes, and according to them, book one is 1,404 pages and book two is 1,248 pages, for a total of 2,652 pages . At perhaps 450 words per page, that puts the tax code at well over 1 million words . (By way of comparison, the King James Bible has 788,280 words; War and Peace runs 560,000 words; and the Harry Potter series is just over 1 million words.)
I will make an effort here to weigh in, as an active CPA and tax preparer. As @hoopoe said there is no simple answer and…it depends.
You can report the $2000 on schedule C as self employment income. Yes, you get dinged with the self-employment tax but many people get the benefit of the 20% QBI (qualified business income) deduction. IF you fall within the threshold (read again if) then you get 20%, in your case $400) deduction on the front page of your 1040, before tax is calculated. This is our typical practice, even for someone who consulted one time and had reportable income. You do not need to enter additional expenses against the income. But if it isn’t on Schedule C (or a 1120S, 1065) then you don’t get the QBI benefit.
Even income reported on a 1099 can be considered self employment income. It depends on the nature of the income. 1099 INT, 1099 DIV, 1099 B are generally investment income (not subject to SE tax). 1099 MISC are now nearly exclusively used to report rents and royalties (so it depends NII tax or SE tax). The new-ish 1099 NEC (non employee compensation) is generally the catch all for individuals who perform services like consulting, marketing, repairs…horse leases. BUT if the 1099 is issued to a corporation or partnership, it is considered ordinary income, not subject to SE tax. Again…it all depends. 
I will take a stab at this one too. The general stance is that credit card rewards are earned and are considered a “rebate” instead of income. You have to spend money to get the points, airline miles, cash back…but there is a requirement to earn them. Sort of like a rebate for contact lenses or Gastrogaurd. BUT if you get $X for opening an account, that is unearned and should be reported as income. Clear as mud, huh?
Please note that I am speaking in very general terms. This is not tax advice…but one professional’s understanding of the tax issues on this thread.
Thank you!
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