Hi y'all, I have a question about filing taxes. I work at a retail store part time. I know I am going to file my taxes for that. I also did one mystery shop I only made $10 from that. I also made some money with this work from home website project payday. I lost more than I made but since I don't have any records, I would have to file taxes. I think I read it here that if we make less than $600, we don't have to file taxes. I only made around $283. Can someone guide me about it? Thanks Saira
I just had my taxes done and I am not an accountant so please take this as info and not instructions on what to do - lol! But my accountant basically said, we should have records of everything that we file... both in expenses and income. So, if you don't have records to prove anything - and should you get get audited - which they do on a random scale at times - it's better to not have it on your file at all, in my opinion...
I am also not an accountant, but I am pretty sure that $600 rule (if you make less than $600 you do not have to file it) is still around. You can always call one of the tax services and ask before you get started to be sure!
Well, if you don't have any records it would be hard to prove anything either way even if you were audited. If the IRS was going to try to audit you, what would they audit? The truth is, that the IRS isn't terribly worried about keeping their eye on small amounts of money like you are talking about. They are more concerned with auditing and finding people evading taxes on a much larger scale. If you would ever do something like this again, it would pay you to maintain records, because as in this case, you lost money. Your documented loss would reduce your taxable income which means you would pay less taxes. If you ever lose money in any endeavour, hang on to your records, because they will lower your taxes!
http://www.irs.gov/individuals/article/0,,id=96623,00.html This should be very helpful for you. Have a great day, Victoria
i'm not an accountant but I play one on tv JK I am a book keeper though and most companies will not report your income to the IRS. SO if you don't file you're ok. The only time the IRS will start looking at you is if a company says, hey she made over 600 with us, she is able to be taxed. Definately always keep some type of record of what you've made. You, if you wanted to, could even set up an LLC and use some of those expenses as tax write offs. BUT if you're not going to be filing there really is no need.
I am a tax preparer and you are both right and wrong on the $600 rule. A company (employer) is not required to send a 1099-M to anyone who made less than $599 for the year. That is where the $600 "rule" comes from. As for the receipient of the money, the law is all income is reportable ( yes, even $10.00). When you add up all the little $5 & $10 you make, it all adds together for your total income. Keep ALL receipts for your expenses so you can deduct them. This will lower your self employment taxes which you are responsible for paying. If you have a large enough loss that you cannot take in this take year, it can carry forward to the next most cases (or backwards in some cases) Hope this helps.
Also, you do not have to set up an LLC to deduct your expenses from your business. An LLC is to protect your assets if you have a liability in your business. A Schedule C what you need to claim your self employment income if you have deductions (expenses). Income received that is not from employment or self employment income with no expenses can be claimed on the 1040 under Other Income and be sure to mark the subject or not subject to SE tax box.
hischicklet: I am a tax preparer and you are both right and wrong on the $600 rule. A company (employer) is not required to send a 1099-M to anyone who made less than $599 for the year. That is where the $600 "rule" comes from. As for the receipient of the money, the law is all income is reportable ( yes, even $10.00). When you add up all the little $5 & $10 you make, it all adds together for your total income. Keep ALL receipts for your expenses so you can deduct them. This will lower your self employment taxes which you are responsible for paying. If you have a large enough loss that you cannot take in this take year, it can carry forward to the next most cases (or backwards in some cases) Hope this helps. Thanks for the excellent advise. I have found too, the hard way, to print out online expenses periodically from online business' rather than assuming you can always get the information from the site at tax time. A couple have gone under, so then you do not have your documentation if you cannot open the site up.
Quick tip: Open a credit card that you use for all your business related purchases. Credit cards keep a nice running documentation of the monies you are spending for your business. I also use a really cool tool that allows me to just enter my business expenses as I make them. I enter all my recurring, monthly costs at the beginning of the year, and then when I buy something business-related just type it in and save. When I get my commission checks, I enter those. Come tax time, the program calculates my profits and losses, categorizes everything by type of expense, and I can log-on to the tax preparation sites and prepare my taxes. That said ... isn't secret shopping the WORST? I did about 5 shops to see what it was all about back when I first started looking at work from home jobs. You end up getting paid much less than minimum wage for your time. Totally not worth it. I found my dream business and was able to quit my job years ago. Good luck in your quest! g
Bottom Line: If you earn over $599, they will file a 1099. If that happens, you will need to report the income, but you can take business expenses off of that income. Jaime McCarley
hischicklet: I am a tax preparer and you are both right and wrong on the $600 rule. A company (employer) is not required to send a 1099-M to anyone who made less than $599 for the year. That is where the $600 "rule" comes from. As for the receipient of the money, the law is all income is reportable ( yes, even $10.00). When you add up all the little $5 & $10 you make, it all adds together for your total income. Keep ALL receipts for your expenses so you can deduct them. This will lower your self employment taxes which you are responsible for paying. If you have a large enough loss that you cannot take in this take year, it can carry forward to the next most cases (or backwards in some cases) Hope this helps. This is very good to know about. Thanks for all the info.
Glad to see I am not the only one worried about taxes... I had heard about the $600 rule but was worried. Does anyone know where to get a tax ID if you do cross the $600 mark?
Income taxes are used for a wide variety of government activities while payroll taxes pay for specific programs.
I could use some help with how to file for self underemployment. To start with, I was on underemployment for the majority of last year , but that ended in November and I started working helping someone setting appointments for them out of there home. I was paid in cash for the work that I did so I don't have receipts for it but I did make around 4500 in the two months that I worked I had to stop due to car broke down and I couldn't afford to fix it. to make matters even worse I learn that someone claimed my twin girls and this person has never even seen my girls he is not the father . I can prove that my girls lived with me last year but I am just lost on where to even begin ..please help me
