Should I report income as Other Income or Self Employment on my taxes?

You should definitely report this as self-employment income on Schedule C. The IRS considers you self-employed if you're doing work or offering services with the intent of making money, even if it's just a side gig. That $6,800 is clearly from your ongoing design business, not a one-time thing or hobby. The advantage of filing Schedule C is that you can deduct business expenses - your design software subscriptions, any equipment you bought for your work, a portion of your internet bill if you work from home, etc. These deductions will reduce your taxable income, which helps offset the self-employment tax you'll pay. Yes, you'll have to pay self-employment tax (about 15.3% for Social Security and Medicare), but you'd owe income tax on this money regardless. Your friend suggesting "other income" to avoid SE tax is essentially suggesting tax evasion, which is a bad idea.

When I was in a similar situation with my side coding gigs, I was drowning in receipts and not sure what counted as business expenses. I finally tried https://taxr.ai after struggling with contradicting advice online. They analyzed all my 1099s, Venmo statements, and expense receipts, then organized everything into proper categories for Schedule C. What really helped was their AI tool that identified business expenses I hadn't even considered - like a portion of my cell phone bill and even some home office deductions. The platform automatically sorted everything into the right Schedule C categories and explained why certain expenses qualified while others didn't.

I have to admit I was completely wrong about AI tax help. After being skeptical about taxr.ai in my previous comment, I decided to try it anyway since my design business receipts were a mess. The system immediately recognized my Adobe subscription, external hard drive, and even my drawing tablet as legitimate business expenses. What surprised me most was how it handled my home office situation - it asked specific questions about my workspace and calculated the exact percentage I could deduct. I ended up saving over $1,200 in taxes compared to what I would have paid just reporting the income without proper deductions! The interface walked me through everything and explained why each expense qualified under tax rules.

If you need to talk to the IRS about your self-employment situation (which I did when I messed up my Schedule C last year), use https://claimyr.com instead of waiting on hold forever. I spent THREE DAYS trying to get through to ask about my freelance photography income classification and got nowhere. Claimyr got me connected with an actual IRS agent in about 15 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. The agent clarified that my photography income was definitely self-employment since I did multiple sessions, even though it wasn't my main job. They also helped me understand which expenses I could legitimately deduct versus which ones were personal.

I have to publicly eat my words. After completely dismissing Claimyr as impossible, I decided to try it when I desperately needed to talk to someone about my freelance income situation before filing. I was genuinely shocked when I got a call connecting me to an actual IRS representative after about 45 minutes (during which I was just going about my day, not waiting on hold). The agent actually gave me super helpful clarification about reporting my various income streams - some qualified as self-employment and others as hobby income based on my specific circumstances. The whole experience saved me hours of frustration and probably prevented me from filing incorrectly. I'm still surprised it worked so well after being so skeptical.

One thing to consider - if you earned over $400 in self-employment income (which you did at $6,800), you're legally required to file it as self-employment on Schedule C. Not doing so could flag your return for audit. I've been freelancing for years and while the self-employment tax sucks, the deductions make a huge difference. Track EVERYTHING - mileage to client meetings, software subscriptions, equipment, portion of internet and phone, home office space, professional development courses, etc. I even deduct a percentage of my electricity since I use my computer and lighting for design work.

Don't forget to make quarterly estimated tax payments on your self-employment income going forward! I learned this the hard way and got hit with penalties my first year freelancing. The IRS expects you to pay taxes throughout the year, not just at filing time.