Tips for The Average Joe
In case you are a fresh freelance, it is likely that you have a variety of queries running through your mind. Certainly, one of the questions is, ‘how I’m I supposed to go about reporting cash earnings without 1099?’ Mostly, this will not be an issue. As far as sundry earnings are concerned, the person you rendered the services is legally needed to present you with a 1099-MISC form. Certainly, another copy of this form will go to the IRS. Sometimes, nonetheless, you’ll not get this form. In such a case, it is imperative to know how you should handle reporting freelance earnings with no 1099. This article dives into what you have to know.
The foremost thing you must know is the potential issues. According to the law, you can only be issued with form 1099 if you earn $600 and above. If your income is below this amount, the paying entity does not have to send out this form. Let’s assume the case where you earn above $1600 but never got 1099. In such an instance, you must try your level best to acquire the form. The easiest way of doing so is contacting your paying party and inquiring doe the form. Remember, some businesses do not issue the forms until January 31. Should the IRS come calling, make certain you have the form. Revenue that is less than $600 is nonetheless judged as taxable. It means the IRS cannot easily affirm you got the money.
Record keeping is another thing to know. Do you want to ensure that all is ready during tax time? You need to keep your yearly income track record. You can use an accounting app or a spreadsheet. Whichever the alternative, ensure you record every penny you earn since it is meaningless keeping furtive from the IRS. When filing your taxes, indicate your sundry revenue on a form 1040. Any tinier amounts must be added to the income you already accounted for on a form 1099. You don’t need to indicate the sources of the tinier revenues, only the totals are important.
Deadline is the other element that’s important to know regarding reporting casual income. Regarding sundry earnings, April 15 is the cut-off date. Certainly, you are not hindered from submitting an application for an extension, a thing that automatically shifts your deadline to October 15. However, this is not an addition to your payment but only on your return. What this means is, you still have to relay a check on April 15. In case you don’t have 1099, it will be necessary for you to use the data you have kept to help estimate your takings.