The Beginners Guide To (Finding The Starting Point)
1 month ago aebi Comments Off on The Beginners Guide To (Finding The Starting Point)
Struggling to Know How to Report a Cash Income Without a 1099 Form? Here is How to Do It
Most clients will pay you in cash when you are a freelancer. It may therefore be challenging to know how to file the taxes when you receive most of your income in cash. The person or company you worked for should send you a 1099 form to use for filling your income. You may assume that it is impossible to file your taxes when you don’t have the 1099 form. You should thus find an online platform that will educate you more on how the 1099 form works. Continue to read this blog to learn the guidelines for reporting cash income without a 1099 form.
The first thing is to know the amounts that you must use the 1099 form, and that is cash earnings above $600. Hence, for earnings that are below $600, you don’t need the 1099 form. The earnings that exceed $600, you should ask the client for the 1099 form. Some clients will not send the 1099 form unless you ask for it. Hence, it is wise you have a written request for the 1099 form when filing your tax returns to avoid problems with IRS.
The next thing is to learn how to deal with the small payments amounts that are less than $600. You are legally required to report all the money you earn, even the small amounts you get as a freelancer. It is therefore wise you find reliable tools for recording all your incomes. You can either invest in an accounting software or use spreadsheets. The goal is to have a comprehensive record that shows all your earnings for the period. Therefore, this record will play a vital role when submitting your taxes and when you are audited by the IRS. Hence, you need to ensure you have an accurate record of all your cash earnings.
The other thing is to learn the deadlines for reporting the miscellaneous incomes. The deadline is April 15, but you have the option to file for an extension. The key thing is to know that the extension is on reporting the income and not paying the taxes. Therefore, even if you don’t have the 1099 form, you are required to send a check to the IRS before April 15. Hence, you need to have a record that will help you calculate the taxes to pay.
Thus, you can pay your taxes on time for the cash income even if you don’t have the 1099 form by the deadline. Some situations may require you to find the best tools for developing the 1099 form yourself.