In case you are a fresh freelance, it is likely that you have a variety of queries running through your mind. Certainly, one of the questions is, ‘how I’m I supposed to go about reporting cash earnings without 1099?’ In most cases, this is not a problem. As far as sundry earnings are concerned, the person you rendered the services is legally needed to present you with a 1099-MISC form. Certainly, another copy of this form will go to the IRS. Sometimes, nonetheless, you’ll not get this form. In such a case, it is imperative to know how you should handle reporting freelance earnings with no 1099. Explained on the page below is what you ought to know.
Potential issues are the first elements you must be aware of. According to the law, you can only be issued with form 1099 if you earn $600 and above. If you have earned below this figure, the paying company doesn’t require sending out the form. Let’s consider the likelihood that you got more than $1600 but did not get 1099. In such a case, you should do your best to get the form. The most straightforward way to do this is to contact your paying business and appeal for this form. Remember, some companies do not give these forms till 31st January. Ensure you have the form when the IRS comes calling. 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 another thing to know. Do you have the intention of ensuring nothing everything is prepared when tax time arrives? You are supposed to monitor your earnings all through the year. You can use an accounting app or a spreadsheet. Whichever option, you should not each cent you get because it is not meaningful to hide anything from the IRS. When filing your taxes, indicate your sundry revenue on a form 1040. Any tinier amounts must be added to the income you already accounted for on a form 1099. You don’t have to explain the sources of the smaller amounts, all that is needed are the totals.
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. However, this is not an addition to your payment but only on your return. What this means is, you still have to relay a check on April 15. If you do not have 1099, you’ll have to use your records to approximate your income.