Tax question

[@M]

So, I'm almost done with my income taxes, but, unsure of where to put $350 I got from a side job. The payer didn't issue me a 1099 NEC/MISC because the total amount was under $600, so, they aren't obligated to do so, and no federal/state taxes or social security were taken out of that $350. I'm thinking I have to file it under Schedule C, even though I don't own or operate a business, but, other people are telling me that I should put it under Misc. Income on Schedule 1, which was also my first inclination, but, I'm pretty sure that you're not supposed to do that unless it's hobby income, which it wasn't. I just want it in the right place so the return doesn't get rejected or audited. Thoughts?

TLDR version: America's elaborate income taxes rules are bullshit.

 

[lithy]

Don't report it.

 

[@M]

That'd be tax fraud, so, no, it has to be reported. There's a paper & electronic trail (several checks remote deposited into my bank account).

 

[lithy]

What was the nature of this work?

Next time get cash.

 

[SML]

What was the nature of this work?

Next time get cash.

High-value target neutralization. M undervalues his skills and also really didn’t think hard enough about how payments should work.

 

[@M]

Tech stuff for a church.

 

[lithy]

Then yes, if you're going the give unto Caesar route, it's Schedule C because it would have generated a 1099 except you didn't make over the limit.

 

[wyo]

If there's no 1099 issued it's below the reporting threshold. At the very least you have plausible deniability in case of an audit. They're not going to send a SWAT team round to collect $35.

 

[kernow]

I don't understand doing your own taxes, I'd probably be in prison by now. Thank god it's all done for us.

 

[StevenK]

I don't understand doing your own taxes, I'd probably be in prison by now. Thank god it's all done for us.

Be careful on your next payrise, everyone who earns over 100k in the UK has to file a tax return, regardless of whether you have any other investments.

 

[kernow]

Be careful on your next payrise, everyone who earns over 100k in the UK has to file a tax return, regardless of whether you have any other investments.

Brilliant

 

[StevenK]

Do americans get taxed at source on monthly salaried income, then just need to make sure it was all correct at the end of the year, or do they pay nothing at all all year then have to make a lump payment in one go?

 

[wyo]

Do americans get taxed at source on monthly salaried income, then just need to make sure it was all correct at the end of the year, or do they pay nothing at all all year then have to make a lump payment in one go?

Salaried employees have tax withholding as they go then file a return at the end of the year, at which point any overage is refunded or paid if due.

Self-employed/small business generally pay estimated taxes quarterly and file at the end of the year. Some just have to file and pay annually if it's below a certain amount.

 

[fake]

If there's no 1099 issued it's below the reporting threshold. At the very least you have plausible deniability in case of an audit. They're not going to send a SWAT team round to collect $35.

This is the correct answer. If you didn't break the threshold to get a 1099, don't report it. Your customer didn't, so it's not like there's going to be a mismatch that brings up a red flag.

Do americans get taxed at source on monthly salaried income, then just need to make sure it was all correct at the end of the year, or do they pay nothing at all all year then have to make a lump payment in one go?

Salaried employees get estimated state and federal taxes deducted from every paycheck. It's not exact, so once they submit their tax forms, they'll either owe more or get a refund. When you get onboarded, they usually let you choose between erring on the side of caution or getting more money up front.

If you do self-employed Schedule C work like Lithy mentioned, you have to keep track of everything yourself and submit quarterly tax estimates and actually send them the money up front. Then it's the same thing – owing more or getting a refund depending on how accurate your estimates were.

Edit: Wyo wrote the same response while I was typing.

 

[BIG BEAR]

Given what's been going on lately,I'd be more confident that he would have nothing to worry about if the amount was 35 million.
BB

They're not going to send a SWAT team round to collect $35.

 

[Neo Alec]

Do americans get taxed at source on monthly salaried income, then just need to make sure it was all correct at the end of the year, or do they pay nothing at all all year then have to make a lump payment in one go?

Salaried employees have estimated taxes automatically withheld based on withholding elections set upfront. Just taking the actual taxes out upfront would probably be fine for most salaried employees below a certain income level (which is what I understand most countries do), but in this country we can't do that because 'freedum' and all (we're the Mexico of first world nations, you can pry my taxes, guns and dangerous food additives from my cold dead hands). There's a whole industry that's grown around doing the paperwork, so common sense tax reform is out of the question.

 

[@M]

They're not going to send a SWAT team round to collect $35.

I'm not worried about that, just having them rejected and/or being assessed fines/penalties. I have all the paperwork I'd need to prove that extra income if it came to an audit, but, I'd rather not have to go through that hassle either.

 

[wyo]

If you don't get a 1099 it doesn't exist as far as the IRS is concerned. 1099s require 2 parties. The business files them as expenses, the contractor receives them as income. If it's not an expense for the business it's not an income for you.

If you claim it, the government is coming out ahead. Is that what you want?

 

[@M]

Wyo, if you don't claim all your income, that's tax fraud, regardless of whether you get a 1099 or not. The church doesn't have to file a 1099 because I didn't make $600+ from them, but, that doesn't absolve me from reporting that money I earned to the IRS and paying taxes on it.

 

[wyo]

Are you claiming the cash back from Ali Express purchases?

 

[NeoSneth]

There is no trail. Don't report it. Everyone commits tax fraud unknowingly to some degree.
If it's under their reporting threshold, I wouldn't claim it. That's exactly why they have thresholds, because it's not enough for them to care or audit.

 

[@M]

Are you claiming the cash back from Ali Express purchases?

No, cashbacks are considered rebates on purchases, not income, and don't have to be claimed. When I first got a credit card with cashback, I was going to claim them on my taxes that year but, I then learned that those aren't applicable. But, if they were, then, yes, I would claim them.

 

[Neo Alec]

The church doesn't have to file a 1099 because I didn't make $600+ from them, but, that doesn't absolve me from reporting that money I earned to the IRS and paying taxes on it.

They don't have to file because they're a church. The only law they're beholden to is god's.

 

[max 330 megafartz]

Today I learned that I’ve been commiting M’s version of tax fraud my entire adult life.
Oops, oh well.
Wonder if I should report every time someone buys me a drink at the bar as well?

 

[@M]

I believe that gifts don't have to be reported unless they're quite large.