Everyone knows that when you work for an employer or are self-employed, you are supposed to fill out a tax return on the money that you earned. But not everyone has a traditional job. Sometimes you may work on odd jobs, whether you do this just for something to do when you’re unemployed or on the side of your regular job. These are not your full time job and are done on occasion rather than on a regular basis. No matter what kinds of jobs you are doing on the side, the IRS requires that you report this income, even if you receive payment as services, cash, or some other means. Some of the jobs that can fit under this category include contractor, handyman services, or even babysitting.
When it comes to your tax return, you will need to claim this money as self-employment income, even if this isn’t a business or other regular gig that you are working on. If you worked any odd jobs during the year, make sure that you take the time to keep accurate records and then bring these in to a tax professional who will be able to help you out with this. The professional will be able to look at all your information and get it put in correctly so you can get the return done properly and get on to other things in life.
Who Needs to File
If you work on some odd jobs and earn more than $400 from these jobs, you will need to file your tax return. This is true even if you aren’t making any income from other sources. If you make less than this $400, you will not have to add this into your taxes, as long as your total income threshold stays below a limit that is set. For most taxpayers, this is going to be under $10,150. If you make more than this, you will need to claim the money from odd jobs no matter how much you make. For those who are uncertain about whether they meet the threshold and if they need to file their tax return, make sure you hire the right tax professional to get this all taken care of.
Earnings to Report
Many people feel that you have to make $600 or more from one single client before you need to report it. They feel that if they never make this amount from one client, than they aren’t required to file at all. This is not true. Instead, if you make more than $600 with all your clients added together, you will need to file a tax return that claims this income. You might receive a 1099-MISC form if you make over the $600 from one client, but just because a client fails to send this doesn’t mean that you don’t have to file the taxes.
Doing the Reporting
If you happen to make any money on the side, you need to make sure that you are keeping accurate records during the whole year. This makes it easier to do your tax return because you will already have everything in place and won’t have to worry about things not working out right or having to keep the information in order later on. You should be able to claim the money that you made as self-employment income so this is easy to get done. If you are uncertain on how to do the accounting on your side jobs and you want to ensure that you are able to get this form filled out properly, find the right tax professional who will be able to help you out with the whole process. This ensures that you get the whole thing done right the first time and have all the income reported to the IRS on time.
Self-Employment Basics
To understand how this kind of reporting works, you need to understand how the IRS sees self-employment. During the year, you should be keeping good records of the money that you are making as a self-employed individual. If you bring in more than $400 in income, all together from all your clients, through the year, you are going to need to pay self-employment taxes. This tax is important because it is not only going to take care of your tax bill but also your Medicare and Social Security taxes. Since you won’t have an employer who is taking care of these taxes for you, you will need to pay them to have these benefits later on.
Your tax return will make it easy to report this kind of income and you can get it done in no time. Make sure to calculate the total that you made from all clients so that you can pay the proper taxes when you get close to tax season. It is not a good idea to try and hide income from the IRS or to make false claims on your tax return. This is going to make you pay too little in taxes and could get you in trouble during an audit.
When you are ready to file a tax return for your self-employment or odd jobs income, make sure to go with the very best in tax professionals. Our company has all the experience that you need in order to get those tax returns done on time and get the most out of this tax season. Contact us today.
