Even if you didn’t receive a 1099-MISC or W-2, you still need to report side job earnings on a tax return…
If you earned money from a side job and didn’t receive a form 1099-MISC or W-2 form, then you may think you’re off the hook from reporting it on your tax return. Think again.
The IRS requires taxpayers to report all income from any source. Even if it’s from a side job.
In fact, you’ll need to report it as self-employment income on a business tax return (Sch. C).
Reporting Money Earned From Side Jobs
You might be confused and asking “I don’t have a business-Why would I file a business tax return?” According to the IRS, “All income earned through the taxpayer’s business, as an independent contractor or from informal side jobs is self-employment income, which is fully taxable and must be reported on Form 1040.”
In other words, even if you don’t consider yourself a business owner or self-employed, if you’re 18 years or older, you’ll still need to report income earned from side work as self employment income on a Business Tax Return (even if it’s less than $600).
This includes fees received from;
- caretaking
- babysitting
- tutoring
- housekeeping
- dog walking
- lawn cutting
- repairing computers
- working as an independent contractor
Different regulations apply to those under 18, meaning your 15 year old daughter who does occasional babysitting isn’t subject to self-employment tax.
How to Report Income From Side Jobs on RapidTax
While reporting the extra money you earned from a side job, your natural instinct may be to report it as “Other Income” on your tax return. This is not correct.
Doing so will most likely result in the IRS rejecting your tax return. Instead, report your earnings the right way (as “Self-employment Income”) the first time around.
Avoid the frustration of reporting multiple types of income on various forms and file your taxes online. RapidTax will do the hard work for you.
Follow these steps to Report self-employment income from a side job with RapidTax;
- Create a RapidTax account
- Enter Your Basic Personal Information
- In the Income Section, select the second box titled Business & Self-Employment Income… and click the green Save & Go button
- On the next page titled Business, Rental & Other Income, click the green box titled +Add Business Income
- On the Business Income page, select your side job type from the drop down menu, fill in the Business Information section with your own name and address (you’ll skip the Employer ID Number (EIN) field, since you weren’t paid by a specific employer or company).
- Report the amount you earned from your side jobs in the box titled Other Gross Income or Gross Receipts NOT reported on a 1099-Misc
- After entering your income, you’ll fill in any fields below that apply to you.
Don’t forget to click the green Save & Go button at the bottom of the page! Afterwards, you’ll be able to report any other income you have before moving onto the Deductions, Credits and State Info sections.
Remember to report ALL income, from ALL sources
If you decide not to include all income you earned over the year, it could come back to hurt you later on. Although these IRS guidelines may seem obnoxious and annoying, it’s the law.
If you’re overwhelmed or confused on how to report your income, we’re here to help. Call, chat or email us.
You’ll be able to get started on your 2014 Tax Return in mid-January. Until then, create an account today and get caught up on your previous year tax returns!
