Side Gigs

[mmwilliams92]

I have several side gigs doing babysitting and house cleaning. I'm aware that for the 2022 tax year I have to report anything over $600. What forms do I need and how should I communicate with my clients about this so that they have the correct forms/information that they need. Help! 

Thanks so much!

M

[tagteam · Accepted solution]

Tax reporting statements (such as a Form 1099), in terms of forms that need to be filed for those who pay you money, are the responsibility of the payers (the people for whom you perform services). You may have to provide your social security number or employer identification number (if you have one or decide to get one).

Read through the information at the IRS web site below for your specific responsibilities in terms of federal income tax reporting, et al.

See https://www.irs.gov/businesses/small-businesses-self-employed/manage-taxes-for-your-gig-work

[Opus 17]

Your clients don't need any special paperwork.  The only time** your clients or customers would issue a tax form like a 1099-NEC is if they are a business and they paid you more than $600.  (In other words, if you clean the business offices of John Smith, attorney, he must issue a 1099, but if you clean John Smith's personal home, he does not issue any tax paperwork.  If you work for another business, they should already know these rules.)

**There is an exception to this rule if you regularly provide child care in the same person's home and they pay you more than $2,400 in a year—in that case, you are their household employee and they must issue you a W-2 and follow certain other rules.  We can talk more about that if that is your situation.   You can be a household employee of one family and still have side gigs with other families that would be reported on Schedule C. 

You are responsible/required to keep your own accurate records of your income and expenses.  Your main expenses are probably travel and cleaning supplies.  If you provide child care in your home, you may be able to deduct a portion of your household expenses (mortgage or rent, utilities, insurance, food) as business expenses.

Your income and expenses are listed on schedule C, and you pay income tax and self-employment tax on your net profits.  Depending on how much you expect to earn, you may need to make estimated tax payments.

I believe @Critter-3  and @VolvoGirl  have some information and links they post to similar questions. 

[VolvoGirl]

When you get paid with a 1099NEC or no form you are a self employed independent contractor. You will file a Schedule C in your personal 1040 return.

Some general info on self employment on Schedule C.......

You will need to keep good records. You may get a 1099NEC at the end of the year if someone pays you more than $600 but you need to report all your income no matter how small. You might want to use Quicken or QuickBooks to keep track of your income and expenses.

There is also QuickBooks Self Employment bundle you can check out which includes one Turbo Tax Online Self Employed return....
https://quickbooks.intuit.com/self-employed

When you are self employed you are in business for yourself and the person or company that pays you is your customer or client.

To report your self employment income you will fill out schedule C in your personal 1040 tax return and pay SE self employment Tax. You will need to use the Online Self Employed version or any Desktop program but the Desktop Home & Business version will have the most help.

Turbo Tax Beginners Tax Guide for the Self Employed
https://turbotax.intuit.com/tax-tips/self-employment-taxes/beginners-tax-guide-for-the-self-employed...

What is form 1099NEC?
https://turbotax.intuit.com/tax-tips/irs-tax-forms/what-is-form-1099-nec/L5fbwIFSn

Here is some IRS reading material……
IRS information on Self Employment
https://www.irs.gov/businesses/small-businesses-self-employed/self-employed-individuals-tax-center

Publication 334, Tax Guide for Small Business
https://www.irs.gov/pub/irs-pdf/p334.pdf

Publication 535 Business Expenses
https://www.irs.gov/pub/irs-pdf/p535.pdf

You pay Self Employment tax on $400 or more of net profit from self-employment in addition to any regular income tax. You pay 15.3% SE tax on 92.35% of your Net Profit greater than $400. The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare. So you get social security credit for it when you retire.