The Essentials of – 101
If you are a beginner freelancer, you probably have many questions on your mind. Certainly, one of the questions is, ‘how I’m I supposed to go about reporting cash earnings without 1099?’ In many instances, this will not be a concern. Concerning sundry revenue, the one you worked with has the responsibility of sending you a 1099-MISC form. Definitely, the IRS will receive another copy of the 1099-MISC form. At times, nonetheless, you will not obtain this form. In such occurrences, it is helpful to know the way forward as far as reporting casual income devoid of 1099 is concerned. This article dives into what you have to know.
The foremost thing you must know is the potential issues. As per the law, a Form 1099 must only be issued for $600 or more amounts. If you have earned below this figure, the paying company doesn’t require sending out the form. Let’s assume the case where you earn above $1600 but never got 1099. In a case like this, you must try all you can to obtain the form. The simplest way of doing so is by calling your paying company and asking for the form. Remember, some companies will wait until January 31 to give the form. In the instance, the IRS comes calling, you should ensure the form is available. 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 the second thing to know. Want to make certain everything is orderly when tax time comes? You should track your income throughout the year. 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. You need to include a smaller amount to revenues you already noted on a form 1099. You don’t need to indicate the sources of the tinier revenues, only the totals are important.
Deadline is also a crucial thing to understand concerning reporting freelance earnings. Regarding sundry earnings, April 15 is the cut-off date. Definitely, one is allowed to submit a request for an extension, making their closing date automatically October 15. Nonetheless, this extension does not impact your payment but your return only. What this implies is, you yet ought to pass on 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.