There are many people who don't know how to report a player over X-Box Live, so here you go. Mind you, this method of reporting is applicable to all games. It doesn't matter which game they were cheating on, or however they were harassing you this is how to report them.
First, go to their gamer profile. Then, select "File Complaint", which is just below "Submit Player Review" towards the bottom of the list. After selecting "File Complaint" you will be prompted if you are sure you want to, and it will give you the option of more information or to cancel. If you're sure, select "File Complaint" again and you will be brought to the "General Reason" screen.
This screen has four categories. Profile, Text and Voice Communications, Video Communications, and Tampering. Each of these categories have more specific reasons inside them. Here's a breakdown in simple terms.
Profile:
1. Gamertag: The person's gamertag is offensive or inappropriate. A gamertag such as "Nazilover69" would be an example. "CoDlover85" would not be an example. If the person's gamertag is sexually explicit, racist, or otherwise unacceptable you would select this option.
2. Personal Picture: The person's personal picture is offensive or inappropriate. A picture of a nude figure or of someone torturing an animal would be an example. A picture of a religious symbol or of a clothed woman would not be an example. If the person's personal picture is sexually explicit, racist, or promoting abuse then you would select this option.
3. Personal Info: The person's motto, name, location, or bio is offensive or inappropriate. If any of these things are saying racist, sexually explicit, or derogatory things then you would select this option.
4. Player Content: In-game content created by the person was offensive or inappropriate. Content may consist of images, game maps, characters, vehicles, and so on. An image of a nude anime character created in forge world would be an example of this. An image of a clothed anime character in forge world would not be an example. If any of the players in-game content is sexually explicit, racist, or otherwise unacceptable this would be the option you choose.
Text and Voice Communications:
1. Text Message: The person sent you a vulgar, hateful, harassing, or threatening text message. Vulgar means that the message includes swear words or sexual phrases, hateful means that the message was sent to make you angry or to show you that they are angry, harassing means that they send multiple messages to blow up your notifications, and threatening means that they are threatening to hurt, kill, ban you from a game, hack your account, etc. If you've received a text message like this then this is the option you would choose.
2. Voice Message: The person sent you a vulgar, hateful, harassing, or threatening voice message. Vulgar means that the message includes swear words or sexual phrases, hateful means that the message was sent to make you angry or to show you that they are angry, harassing means that they send multiple messages to blow up your notifications, and threatening means that they are threatening to hurt, kill, ban you from a game, hack your account, etc. If you've received a voice message like this then this is the option you would choose.
3. Voice Chat: The person used vulgar, hateful, harassing, or threatening language in voice chat. Voice chat is the chat used in parties or private chats. If a player invited you to a party or joined a party with you and did this, then this is the option you would choose.
4. In-Game Voice: The player used vulgar, hateful, harassing, or threatening language during in-game communications. This means that if a player was "talking smack" in-game, then this is the option you would choose.
Video Communications:
1. Picture Message: The person sent you a vulgar, hateful, harassing, or threatening picture message. This means that if you receive a nude picture, a picture of something hateful or threatening, or the same picture over and over from the same person then this is the option you would choose.
2. Video Chat: The person used vulgar, hateful, harassing, or threatening language or gestures in Video Kinect or in-game video chat. If you were in a video chat with someone who did any of the above, then this is the option you would choose.
Tampering:
1. Feedback Tampering: The person misused the feedback system or attempted to influence player feedback. This means that if the person tried to get you to give them negative or positive feedback or threatened to give you negative or positive feedback, this is the option you would choose.
2. System Tampering: The person altered, attempted to alter, or promoted altering a game, an X-Box console, or X-Box live. This includes system mods, controller mods, lag switches, jtags, or any other type of modification to a console, game, or X-Box live. If the person openly admitted to doing this, it's blatantly obvious that they have done this, or they tried to get you or another person to do this, then this is the option you would choose.
3. Cheating: The person used known or unknown in-game or other exploits to influence the results of a game. This includes hiding off of the map, boosting, afking, spawn sitting (sitting next to a players spawn point and killing them when they spawn), deranking, betraying, or any other in-game method of cheating. If the person did this, then this is the option you would choose.
How does it work? Your report will be sent to Microsoft, who then will investigate your report. If it is accurate, then they will take action against the person who the report was filed against. If the report is not accurate, then no action will be taken. You cannot get banned for reporting too many players, however, you should not abuse this system. You should only report a player who has broken the Code of Conduct which is hyper-linked for your viewing pleasure.