Page 192 - Individual Forms & Instructions Guide

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5. You materially participated in the that may reduce the loss, if any, that you sources. You may receive one or more
activity for any 5 of the prior 10 tax may enter on Schedule C, line 31. For Forms 1099 from people who are re-
years. details, see Pub. 925. quired to provide information to the IRS
6. The activity is a personal service listing amounts that may be income you
activity in which you materially partici- Line H received as a result of your trade or busi-
pated for any 3 prior tax years. A per- If you started or acquired this business ness activities. The following is a list of
sonal service activity is an activity that in 2022, check the box on line H. Also, some of the common Forms 1099.
involves performing personal services in check the box if you are reopening or re- • 1099-MISC. For more information
the field of health, law, engineering, ar- starting this business after temporarily about what is being reported on Form
chitecture, accounting, actuarial science, closing it, and you did not file a 2021 1099-MISC, see the Instructions for Re-
performing arts, or consulting, or any Schedule C for this business. cipient included on that form.
other trade or business in which capital • 1099-NEC. For more information
is not a material income-producing fac- Line I about what is being reported on Form
tor. 1099-NEC, see the Instructions for Re-
If you made any payment in 2022 that cipient included on that form.
7. Based on all the facts and circum-
• 1099-K. For more information
stances, you participated in the activity would require you to file any Forms about what is being reported on Form
on a regular, continuous, and substantial 1099, check the “Yes” box. Otherwise, 1099-K, see the Instructions for Payee
basis for more than 100 hours during the check the “No” box. included on that form and go to IRS.gov/
tax year.Your participation in managing You may have to file information re- Gig.
the activity does not count in determin- turns for wages paid to employees, cer-
ing if you meet this test if any person tain payments of fees and other nonem- Income you report on Sched-
(except you) (a) received compensation ployee compensation, interest, rents, TIP ule C may be qualified business
for performing management services in royalties, real estate transactions, annui- income and entitle you to a de-
connection with the activity, or (b) spent ties, and pensions. You may also have to duction on Form 1040 or 1040-SR,
more hours during the tax year than you file an information return if you sold line 13.
spent performing management services $5,000 or more of consumer products to
in connection with the activity (regard- a person on a buy-sell, a deposit-com- Line 1
less of whether the person was compen- mission, or other similar basis for resale.
sated for the services). Enter gross receipts from your trade or
The Guide to Information Re- business. Be sure to check any Forms
Rental of personal property. General- TIP turns in the 2022 General In- 1099 you received for business income
ly, a rental activity (such as long-term structions for Certain Informa- that must be reported on this line.
equipment leasing) is a passive activity tion Returns identifies which Forms
even if you materially participated in the 1099 must be filed, the amounts to re- If you received one or more Forms
activity. However, if you met any of the port, and the due dates for the required 1099-NEC, be sure line 1 includes
five exceptions listed under Rental Ac- Forms 1099. amounts properly shown on your Forms
tivities in the Instructions for Form 1099-NEC. If the total amounts that
8582, the rental of the property is not were reported in box 1 of Forms
treated as a rental activity and the mate- Part I. Income 1099-NEC are more than the total you
rial participation rules explained earlier are reporting on line 1, attach a state-
apply. ment explaining the difference.
Except as otherwise provided in the In-
Exception for oil and gas. If you are ternal Revenue Code, gross income in- Statutory employees. If you received a
filing Schedule C to report income and cludes income from whatever source de- Form W-2, Wage and Tax Statement,
deductions from an oil or gas well in rived. In certain circumstances, howev- and the "Statutory employee" box in
which you own a working interest di- er, gross income does not include extra- box 13 of that form was checked, report
rectly or through an entity that does not territorial income that is qualifying for- your income and expenses related to that
limit your liability, check the “Yes” box. eign trade income. Use Form 8873 to income on Schedule C. Enter your statu-
The activity of owning a working inter- figure the extraterritorial income exclu- tory employee income from box 1 of
est is not a passive activity, regardless of sion. Report it on Schedule C as ex- Form W-2 on line 1 of Schedule C and
your participation. plained in the Instructions for Form check the box on that line. Social securi-
ty and Medicare tax should have been
Limit on losses. Your business activity 8873. withheld from your earnings; as a result,
loss may be limited if you checked the you do not owe self-employment tax on
“No” box on line G. In addition, your If you were a debtor in a chapter 11 these earnings. Statutory employees in-
rental activity loss may be limited even bankruptcy case during 2022, see Chap- clude full-time life insurance agents,
if you materially participated. In gener- ter 11 Bankruptcy Cases in the Instruc- certain agent or commission drivers and
al, a business activity in which you do tions for Form 1040 (under Income) and traveling salespersons, and certain
not materially participate or a rental ac- the Instructions for Schedule SE. homeworkers.
tivity is a passive activity and you have Be sure to report all income attributa-
to use Form 8582 to apply a limitation ble to your trade or business from all

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