Question: The Form 1040 Schedule C Asks for a Activity Code. What is this and how do I pick the right one?
Answer: These codes are based upon the North American Industry Classification System (NAICS) six-digit codes. Schedule C. Arts / Crafts business owners can fall under a few different NAICS codes:
- Arts, Entertainment & Recreation: 711510 - Use this if you are an independent artist (self-employed artist or crafter).
- Educational Services: 611000. Use this if your primary business purpose is teaching arts / crafts classes
- Manufacturing: If your arts / crafts business has risen to the level of a production line business select the appropriate code. These codes are in the 300000 series
- Retail Trade: For those operating an arts / crafts shop. These codes are in the 440000 series.
Which one to chose? Pick the code that most closely describes the main purpose of your business.
Where to find the complete list of business codes for the Schedule C and other types of tax returns such as corporations and S-Corps? Check the IRS instructions for that line of the form. You can find this in the instructional publication for the form.