I am a computer tech that's working at a company right now, but sometimes I do freelance contract jobs. I was told for those contract jobs that as long as in that year I do not earn over $600, I do not have to report this. However, I am confused. Is it $600 per company that I work with or $600 for all companies that I work with throughout the year?
United States - 4 Answers
Random Answers, Critics, Comments, Opinions :
1 :
Assuming that your main job already puts you over the filing requirement, ANY additional income (even $1) must be reported. The companies aren't required to send you a 1099misc until they have paid you at least $600 but you are legally required to report all of your income.
2 :
Each employer that pays you $600 or more, should issue you a form 1099-misc. Income from all 1099-misc, should be reported as income on your tax return.
3 :
Whether or not you'd receive a 1099-MISC at the end of the year substantiating the amount of compensation ("extra income") you have received during the year, all self-employment earnings ("extra income) are reportable.
4 :
If you are paid more than 99 cents for your services then you are required to report the money SOMEWHERE, depending on what your business organization is. If you do not do the work with an intent to make a profit at it, you can just report it on Line 21 as Other Income. If you do the work with the intent of making a profit - and you are a Sole-Proprietor or a Single-Member LLC then you would report in on Line 1 of a Schedule C. If your business is organized as a multi-member LLC or you have a formal partnership then you would report the income on Form 1065. If you are a single-shareholder corporation that has elected "S-Corporation status" then you would report it on an 1120-S. Otherwise it would go on an 1120. Did you get all that? Do you understand NOW why there is a Professional Tax Preparer industry out there? G'Luck... Mike Womack, Sr. Partner Zero Degrees Tax LLP Moore, OK Lawton, OK
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