Laymans terms for filing W2 and UserTesting earnings

Forum|Forum|4 years ago
January 10, 2022
1 reply
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Hi -

Can someone please describe to me in laymans terms exactly what I need to do to file my taxes for 2021?

I work a full-time job and will receive my W-2 here in the next month or so. I also participate in UserTesting and Prolific Academic. Both of these sites do not provide tax documents, however they do pay me through PayPal.

I need to know how to file all of my earnings (W-2 and the money I have made from these other sites).

I usually file a 1040 EZ, however I believe I need to now file another document for my money earned through UserTesting and Prolific. Which means, I think I need to now pay for another version of TurboTax filing software?

Not A Product Question

TomK2023

Level 15

You will need to report this income as seif-employment income on a Schedule C.

If you have business expenses to report, you'll need TurboTax Self-Employed or TurboTax Live Self-Employed to file a Schedule C.

If you don't have business expenses to write off and need to file a Schedule C, you can use TurboTax Deluxe, TurboTax Live Deluxe, TurboTax Premier, or TurboTax Live Premier.

Entering Self-Employment Income:

Open your return
Search for schedule c.
Click on Jump to schedule c.
Answer Yes to Did you have any self-employment income or expenses? (If you've already entered self-employment work and need to enter more, select Add another line of work. )
Follow the onscreen instructions

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c_s_00Author

Level 2

@TomK2023

Great thank you!

A couple more questions:

1.) I purchased $20 worth of Nokia stock in 2020 with Cash App. Do I need to report that? If so, can I do it with TurboTax Deluxe?

2.) Where can I figure out the percentage taxed on my income from UserTesting and Prolific?

BillM223

Level 15

1.) I purchased $20 worth of Nokia stock in 2020 with Cash App. Do I need to report that? If so, can I do it with TurboTax Deluxe?

You do not need to report stock purchases on your tax return, just stock sales.

2.) Where can I figure out the percentage taxed on my income from UserTesting and Prolific?

Since ordinary income is all lumped together before bein taxed, the easiest way to do this is:

1. Write down the amount of tax assessed (line 18 on form 1040) with these two income items included. Also write down your adjusted gross income (line 11 on the 1040).

2. Now remove the two income items from TurboTax and look at line 18 again (this may involve deleting W-2s or 1099-NECs, or, at the least, setting the income boxes on those forms to zero.

3. Subtract the result of line 2 from line 1 - this is the difference in tax.

4. Divide line 3 by your adjusted gross income from line 1. This is "the percentage taxed on my income from UserTesting and Prolific".

5. THIS IS IMPORTANT - before you file, go back and undo the changes from line 2, that is, undo what you did!

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