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Meghan has made salsas and jams for years. In 2022, she set up a website...

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Accounting

Meghan has made salsas and jams for years. In 2022, she set up a website to sell her products. Her gross income was $1,520, and after deducting $550 of expenses, she made a net profit of $970. She did not consider herself to be self-employed this year, but she wanted to test the market before she opens a small retail shop in town in the future. On what form should Meghan's income and expenses be reported?

A. Her net income of $970 should be reported directly on Form 1040, as other income on line 1h.

B. The gross income of $1,520 should be reported as additional income in Part 1 of Schedule 1 (Form 1040), Additional Income and Adjustments to Income, and the expenses should be reported as an adjustment in Part 2.

C. The income should be reported as additional income in Part 1 of Schedule 1 (Form 1040), Additional Income and Adjustments to Income, and, if Meghan itemizes, the expenses should be deducted on Schedule A, Itemized Deductions.

D. Her gross income of $1,520 should be reported in Part I of Schedule C, Profit or Loss From Business, and her expenses should be reported in Part II.

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