Guidelines for Reporting Cash Income Without a 1099 Form
You may be getting cash payments when you are an independent contractor. Hence, you need to seek information on how to handle the cash income when reporting your taxes. Your client is legally required to submit a 1099 form to you when paying you. The employer is required by the law to send you the 1099 form that you will use to report the cash income. In some situations, you may not get the 1099 form, and you may wonder what you should do. It is, therefore, smart you seek online resources on how to handle this hardship. Continue to read this blog to learn the guidelines for reporting cash income without a 1099 form.
With cash income that is more than $600, you are required to use the 1099 form. Thus, if you receive a cash payment below this amount, you don’t need to fill the 1099 form. The earnings that exceed $600, you should ask the client for the 1099 form. The reason is that some companies take too long to send this form, and some may wait until the deadline. Hence, it is wise you have a written request for the 1099 form when filing your tax returns to avoid problems with IRS.
Know that you are required to pay income for the miscellaneous earning that are less than $600 even if you don’t need a 1099 form. You need to know that you are still expected to pay taxes on these small payments. Hence, you need to search for tools you can use for tracking your earnings. You can either invest in an accounting software or use spreadsheets. 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. It is therefore wise you search for the best tools you can use for tracking your incomes as a freelancer.
It is vital you know the last day for reporting your cash income when you are a freelancer. The IRS has set a deadline of April 15, but you can request an extension. Even if you get an extension, you must send the tax check to IRS; the extension gives you more time to file the relevant documents like form 1099. You, therefore, pay your taxes on time without having to send the 1099 form on the April 15 deadline. 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.