cash income only

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Helping son file their taxes. Their income was mainly cash for side jobs how do we file that

M-MTax

Level 15

All cash income from side jobs is fully taxable and must be reported to the IRS, even if your son did not receive an official tax form like a W-2 or a 1099. Because he is performing side jobs for money, the IRS classifies him as an independent contractor or a sole proprietor (self-employed). He is required to file a federal tax return if his net self-employment earnings were $400 or more.

M-MTax

Level 15

Step-by-Step Filing Process

Calculate Gross Receipts: Gather every record of payment he received throughout the year. This includes bank deposits, spreadsheets, invoices, or even text messages confirming jobs and cash amounts. Add them together to get his total gross cash income.
Deduct Business Expenses: He can lower his taxable income by deducting regular, necessary expenses he paid out of pocket to perform his side jobs. Keep receipts for things like tools, materials, safety equipment, or job-related travel costs.
Fill Out Schedule C (Form 1040): Report the total gross cash income on Schedule C: Profit or Loss From Business. Subtract his business expenses on this same form to arrive at his net profit. [1, 2]
Calculate Self-Employment Tax (Schedule SE): If his net profit on Schedule C is $400 or more, he must also fill out Schedule SE: Self-Employment Tax. This calculates his 15.3% contribution toward Social Security and Medicare, which standard employers usually withhold automatically.