Guidelines for Reporting Cash Income Without a 1099 Form
Most clients will pay you in cash when you are a freelancer. Therefore, it is wise you learn how to report the cash income to avoid problems with the IRS. The person or company you worked for should send you a 1099 form to use for filling your income. The problem is when you don’t get this form, and you don’t know how to go about reporting the cash income. To overcome these challenges, you should strive to find the top website that will guide you on the right things to do. Continue to read this blog to learn the guidelines for reporting cash income without a 1099 form.
You should know that the 1099 form is only issued for payments that exceed $600. Thus, if you receive a cash payment below this amount, you don’t need to fill the 1099 form. If you receive a cash payment above $600, it is your duty to request 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. The IRS expects you to report all your incomes for the period irrespective of the amount. It is therefore wise you search for ways you can record all the cash payments you receive. You can opt to use a spreadsheet or accounting software for recording your earnings. You will aim to have a report that breakdowns all the money you earned during the year. You can therefore present this record to IRS during auditing to show you pay all your taxes. 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 IRS expects you to report your cash income on or before April 15 with the option to request an extension. It is, however, wise to know the extension is on submitting the returns and not the tax payment. Thus, as you wait to get the 1099 form, you will send in the tax check to the IRS before April 15. Hence, you need to have a record that will help you calculate the taxes to pay.
Therefore, to report a cash income without the 1099 form, you should follow the above guidelines. You should also search for the top website where you can create the 1099 form yourself.