How to report hobby income and expenses on Form 1040 in Lacerte

In Lacerte, you report gross income from a hobby on Schedule 1 as Other Income. Hobby expenses are no longer deductible on the Schedule A due to the Tax Cuts and Jobs Act, but may still be deductible for your state.

How to report hobby income on Schedule 1:

1. Go to Screen 14.1, SS Benefits, Alimony, Miscellaneous Income.
2. Under the Alimony and Other Income section, enter your hobby income in the Other income field.

How to report hobby expenses for the state:

1. Go to Screen 25, Itemized Deductions (Sch. A).
2. Under State Miscellaneous Deductions (Subject to 2% AGI limitation), locate the Miscellaneous Deductions (2% AGI) subsection.
3. Enter any expense exceeding your total income received in the Other miscellaneous deductions field.

For more information about hobby income and expenses, see IRS Publication 529 Miscellaneous Deductions.