The IRS considers undocumented cash income (no W-2 or 1099-MISC), for work performed, to be self employment income. Enter at "Business Income & Expenses" and TurboTax (TT) will complete Schedule C or C-EZ for you and allow you to deduct any expenses associated with this income. You'll also have to pay self employment tax (social security) on any profits greater than $400.
You may have to upgrade to the Home & Business version of TT. There's a chance you may be able to use TT Deluxe or Premier. Enter your income at the 1099-Misc screen (even if you didn't get a 1099-misc).
In TurboTax (TT), enter at:
- Federal Taxes tab
- Wages & Income
- “I’ll choose what I work on” Button
Scroll down to:
- Other Common Income
-Income from Form 1099-Misc
When asked why you got the 1099-Misc, select “Freelancer or Independent contractor”
You claim the income from your own accounting records. you don't need any proof to file your tax return. If ever audited, you will then need proof. Bank deposit records are a good source of proof.
It should go here as Cash or General Income.
How to enter income from Self Employment
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