Guidelines for Reporting Cash Income Without a 1099 Form
You may be getting cash payments when you are an independent contractor. It may therefore be challenging to know how to file the taxes when you receive most of your income in cash. The person or company you worked for should send you a 1099 form to use for filling your income. The problem is when you don’t get this form, and you don’t know how to go about reporting the cash income. You should thus find an online platform that will educate you more on how the 1099 form works. Here is how to report a cash income when you don’t have the 1099 form.
The first thing is to know the amounts that you must use the 1099 form, and that is cash earnings above $600. Thus, if you receive a cash payment below this amount, you don’t need to fill the 1099 form. If you receive a cash payment above $600, it is your duty to request the client for the 1099 form. Some clients will not send the 1099 form unless you ask for it. Hence, it is wise you have a written request for the 1099 form when filing your tax returns to avoid problems with IRS.
The next thing is to learn how to deal with the small payments amounts that are less than $600. 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. The key thing is to know that the extension is on reporting the income and not paying the taxes. Thus, as you wait to get the 1099 form, you will send in the tax check to the IRS before April 15. Hence, you need to have a record that will help you calculate the taxes to pay.
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.