Struggling to Know How to Report a Cash Income Without a 1099 Form? Here is How to Do It
If you are a freelancer, most of your clients may pay you using cash. 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. 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. Here is how to report a cash income when you don’t have the 1099 form.
With cash income that is more than $600, you are required to use the 1099 form. Hence, you don’t need the 1099 form when you are paid any amount less than $600. It may be necessary to request the client for the 1099 form if you receive a payment that is greater than $600. Understand that this form may be lost in the mailing process, and you won’t know if you don’t follow up with the client. With a request for the 1099 form from the client, you will avoid problems with the IRS.
If you get paid cash less than $600, you need to learn how to handle this income when filing your tax. You need to know that you are still expected to pay taxes on these small payments. It is therefore wise you find reliable tools for recording all your incomes. To ease your work, you should opt to use a spreadsheet or accounting software to record all the cash incomes you get. The goal is to have a comprehensive record that shows all your earnings for the period. Therefore, this record will play a vital role when submitting your taxes and when you are audited by the IRS. It is therefore wise you search for the best tools you can use for tracking your incomes as a freelancer.
The other thing is to learn the deadlines for reporting the miscellaneous incomes. The deadline is April 15, but you have the option to file for an extension. The key thing is to know that the extension is on reporting the income and not paying the taxes. Therefore, even if you don’t have the 1099 form, you are required to send a check to the IRS before April 15. You will therefore estimate the total taxes to pay before you get the 1099 form.
Hence, the above tips target to make it simple to know how to report a cash income without a 1099 form. In some instances, you can consider creating the 1099 form yourself.