Guidelines for Reporting Cash Income Without a 1099 Form
If you are a freelancer, most of your clients may pay you using cash. Hence, you need to seek information on how to handle the cash income when reporting your taxes. 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. Read more now to see the tips to assist you on how to report cash income without a 1099 form.
You should know that the 1099 form is only issued for payments that exceed $600. Hence, for earnings that are below $600, you don’t need the 1099 form. If you receive a cash payment above $600, it is your duty to request the client for the 1099 form. 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. The IRS expects you to report all your incomes for the period irrespective of the amount. It is therefore wise you search for ways you can record all the cash payments you receive. 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. You can therefore present this record to IRS during auditing to show you pay all your taxes. Thus, if you are a freelancer, you need to keep track of all the cash incomes for the period.
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. It is, however, wise to know the extension is on submitting the returns and not the tax payment. 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 your income and submit the payment.
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.