Income as a Freelancer
Most clients will pay you in cash when you are a freelancer. It may therefore be challenging to know how to file the taxes when you receive most of your income in cash. 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. 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 about how to report cash income without a 1099 form.
When Are You Required to File a 1099 Form?
With cash income that is more than $600, you are required to use the 1099 form. Hence, for earnings that are below $600, you don’t need 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. Thus, even if you don’t have the 1099 form, it is wise you have a record of the request when filing your income tax.
Track Your Earnings
If you get paid cash less than $600, you need to learn how to handle this income when filing your tax. You are legally required to report all the money you earn, even the small amounts you get as a freelancer. Hence, you need to search for tools you can use for tracking your earnings. 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. Therefore, this record will play a vital role when submitting your taxes and when you are audited by the IRS. It is therefore recommended that you visit https://www.thepaystubs.com/blog/how-to/the-ultimate-guide-on-how-to-report-cash-income-without-a-1099 to search for the best tools you can use for tracking your incomes as a freelancer.
Be Aware of Deadlines
You also need to know the deadline for reporting the cash income. The IRS has set a deadline of April 15, but you can request an extension. The key thing is to know that the extension is on reporting the income and not paying the taxes. You, therefore, pay your taxes on time without having to send the 1099 form on the April 15 deadline. You will therefore estimate your income and submit the payment.
Thus, you can pay your taxes on time for the cash income even if you don’t have the 1099 form by the deadline. You should also search for the top website where you can create the 1099 form yourself.