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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.
I was told by a live agent to put cash income in "other income". Is this incorrect? I was self employed only paid cash no 1099.
Depends. It should be on schedule C as self employment income which goes to Schedule 1 line 3. Or did it show up on Schedule 1 line 8 Other Income?
It should go here as Cash or General Income.
How to enter income from Self Employment
It's asking for the payers EIN which I don't have since I didn't get a 1099 from her
There is no EIN for Cash.
Depending on what type of work also I claim income has a Household Employee which ranges from all kinds of work that you do for the home inside and out even running errands. Only if I make more $1900 in cash wages from the same individual than you have to pay Social Security and Medicare taxes. If you make $750 or more in a calendar quarter for the year from a single individual than you will have to pay taxes Each year the amount changes.
@Tqgrl78 I think you have that wrong. If the person pays you 1900 or more they should pay you as a household employee and take out ss and medicare and give you a W2. I might have that wrong about the $1900, it might be less than $1,900. You get SS credit for any quarter you make $750.
If you don't get a W2 from the person paying you then you have to file it as self employment income with no minimum. You will pay SS & Medicare tax on any self employment income of $400 or more in addition to any regular income tax on it.
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