I was wondering, in the US when you file your tax return you are either a "normal" salaried employee, W-2, or "self-employed".
If you're a "normal" salaried filer, there's a box where you can enter "other income", typically small amounts like $100 from odd jobs.
Say you're a "normal" salaried filer. You're a student so you make $25k at the donut shop. But. You also do one freelance project for which you get $5,000 bucks (gross). (Perhaps you're a music student and you scored one paid gig that year.)
I believe, as a "normal" filer you can also file a Sched-C for the self-employed part.
Alternately can you simply put in the 5,000 bucks as "Other Income"?
Let's say that you have No costs or deductions so the Sched-C would just be 5000 straight bucks anyway, there is no advantage.
Is it basically "OK" to put in a large amount, $5,000, in "Other Income"? Is there perhaps some limit?
Is there some "nature of" where one cannot put items in Other Income, but rather you're forced to do a Sched-C? (Perhaps if it is "professional services" or some such - IDK)
In the example, assuming there are no costs/deductions etc so there is no fiscal advantage to using a Sched-C, is it perfectly OK to just bang in $5,000 "Other Income"?
I couldn't really find any doco. on "What is permissible in Other Income".
Note: the excellent answer below sheds light on IRS opinion on "hobby V. business".
However, it would seem that "hobbies" do not relate to the "Other Income" facility.
It would seem that the idea "Other Income is for Hobbies" is in fact just a common misconception.
There is no doco on that anywhere.
(Ineed: many of the IRS examples for "Other Income" are unrelated to hobbies. Conversely the IRS page on "hobby" discusses explicitly entering costs on a Sched-C for a hobby.)
The 'Ben Questions' ...
(1) the literal IRS instructions https://www.irs.gov/instructions/i1040gi#idm140693681999728 Use line 8 to report any taxable income not reported elsewhere on your return or other schedules it dun' don't even MENTION a hobby aspect. it's just "any income".
(2) actually on IRS web site (some sort of "course"?) https://apps.irs.gov/app/vita/content/globalmedia/4491_other_income.pdf Section "What is other income?" It does not even mention hobby income.
(3) Typical reasonably sensible source: https://www.thebalance.com/other-income-form-1040-line-21-3193089 Note the list at "Who Uses Other Income on Form 1040?" It does not even MENTION hobby income.
For me it remains a mystery :/