Rev Transcription Income

[cocob2001]

I started a Rev transcription account in 2019 as an 18 year old, didn’t know what I was doing other than to make money. Rev paid me through PayPal a total of $45 and some change for the year . I did not do this service continually or regularly, which is what confuses me when I’m doing my tax return for that year (it just occurred to me that I had income from that year that I need to file) schedule c is what I assume I would need to file but I am unsure. What should I do? I’ve done this sporadic service throughout 2020 and 2021 as well so of course I’ll need to report that on my returns but I can’t even figure out how to start and what means what. 

[xmasbaby0]

If your only income in 2019 was "$45 and some change" you do not need to file a 2019 tax return, so do not worry about 2019.    

The current online software is only for 2024 returns; it cannot be used for any other year.    If you had more than $400 of self-employment income for 2020 or 2021, you need to file returns for those years and pay self-employment tax for Social Security and Medicare.    

Software is no longer available for 2020, but you could use paper forms to prepare by hand and mail in to the IRS.   Again---you only need to do this if you had more than $400 of self-employment income for 2020.   If it was less, do not worry about 2020.

The same is true for 2021----if you had more than $400 of self-employment income you can use the desktop download software on a full PC or Mac to prepare a 2021 return to mail in.   It cannot be e-filed.  Software for 2021 is still available; after mid-October the 2021 software will be gone.

If you had self-employment income, you also prepare a Schedule C for any business expenses you had.   

You have not mentioned tax years 2023 or 2024.

You cannot change the tax year.   The current online program is for 2024 only.   Only a 2024 return can be prepared online and only a 2024 return can be e-filed.

Online preparation and e-filing for 2021, 2022, and  2023 is permanently closed.

Note:  The desktop software you need to prepare the prior year return must be installed/downloaded to a full PC or Mac.  It cannot be used on a mobile device.

To file a return for a prior tax year

 If you need to prepare a return for 2021, 2022, or 2023  you can purchase and download desktop software to do it, then print, sign,  and mail the return(s)

https://turbotax.intuit.com/personal-taxes/past-years-products/

You may also want to explore purchasing the software from various retailers such as Amazon, Costco, Best Buy, Walmart, Sam’s, etc.

Remember to prepare your state return as well—if you live in a state that has a state income tax.

https://ttlc.intuit.com/turbotax-support/en-us/help-article/state-taxes/contact-state-department-rev...

When you mail a tax return, you need to attach any documents showing tax withheld, such as your W-2’s or any 1099’s.  Use a mailing service that will track it, such as certified mail so you will know the IRS/state received the return.

Federal and state returns must be in separate envelopes and they are mailed to different addresses.  Read the mailing instructions that print with your tax return carefully so you mail them to the right addresses.

[cocob2001]

I had some income from bank savings interest, but from Rev all I made that year was 45. Similar in 2020 and 2021, I made some dollars from Rev but also had interest from my savings account and I sold some stocks. Would I need to file schedule c in those instances?

[Opus 17]

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@cocob2001 wrote:

I had some income from bank savings interest, but from Rev all I made that year was 45. Similar in 2020 and 2021, I made some dollars from Rev but also had interest from my savings account and I sold some stocks. Would I need to file schedule c in those instances?

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I'm curious about why this is coming up now.

Your tax return is a form 1040.  If you are engaged in a business, then your 1040 includes as an attachment, a schedule C.  Schedule C lists business income and expenses, and calculates net profit, which flows to form 1040 where it is combined with any other income.

---Step 1---

The first question we have to ask is, were you required to file any tax return for any reason in 2019, 2020, etc.  You were required to file if your total taxable income was more than the amount shown below.

2019 $12,200

2020 $12,400

2021 $12,550

2022 $12,950

2023 $13,850

2024 $14,600

Or, you are required to file if your net income (gross income minus expenses) from self-employment was more than $400 in any one year, even if your total income was less than the $12,000+ threshold.

So if your Rev was always less than $400 per year, we can ignore that rule for now.  Then we go back to total income -- was there any year when your total income (selling stocks, bank interest, and Rev) was more than the $12,200+ threshold shown in the chart.

Remember that money from the sale of stocks is not all taxable, only the gain.  For example, if you bought the stocks, or someone gave them to you, and paid $10 a share, and you sell for $15 a share, your taxable income is not $15, but $5, the amount of gain.

If your Rev income was always less than $400 and your total income was always less than the chart, then you were never required to file a return, and there is no reason to file one now unless a bank or college wants to see it (and even then, I would double check, because if your income was always too low to file, then why make you file now?)

However, if you file for any reason, then you must list all your income, no matter how small each item is.

---Step 2---

If you decide to file a return for one or more past years, you must include the Rev income along with everything else (interest, stocks, etc.).  However, Rev might be a business or it might be a hobby.  That depends on how active you are.  The IRS has some guidance here.

https://www.irs.gov/newsroom/hobby-or-business-heres-what-to-know-about-that-side-hustle

Since you don't appear to have engaged in the business regularly, with a profit motive, and you did not rely on the income, it would seem to me that you can treat it like a hobby (but you have to make that decision for yourself).  If it is a hobby, it is still taxable as miscellaneous (hobby) income, but you don't include a schedule C and you don't deduct business expenses.

[cocob2001]

It’s coming up now because tax anxiety. Seeing as I never filed anything, I was worried I’d be hounded for it. All my income for each year never went over 12,000, the closest I came was I believe $4-5 thousand something in 2020 or 2021 for my stocks and crypto + savings interest (don’t have my files as im typing this but I did go through my files for returns)  I read everywhere that I should still report any money I made no matter how little, so that’s why I feel the need to file a return.

[Opus 17]

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@cocob2001 wrote:

 I read everywhere that I should still report any money I made no matter how little, so that’s why I feel the need to file a return.

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If you file, you must report everything, no matter how small the individual pieces are.  But the overall requirement is what I described above, and you are not likely to be "hounded" unless your bank account suddenly starts getting 10s of thousands of dollars with no apparent source.  

[cocob2001]

Thank you, I still would like to file because I already paid for filing my return. I would consider rev a hobby as I wasn’t sitting there typing every weekday of every month with a schedule, just did it on and off between a couple months in the year. So if I want to report it, should I go with 1099 misc? And would I be considered self employed for that tax year despite making so few and not treating it as a job. It is called rev freelance transcription though. I’m just confused about what forms I should use at this point. Thank you for your time

[xmasbaby0]

@cocob2001 You received an excellent and detailed reply from Champ @Opus 17  regarding your situation.   Based on your description of the income you received in those past years, you would not have had a filing requirement unless -- as explained by both of us-- you had over $400 of self-employment income (which would have been from the "freelance" work you did).   

I am curious as to how you have "already paid for filing my return"     --- using what software?   As already explained, TurboTax does not provide software for any tax year earlier than 2021, so there is not a way for you to use TT for 2019 or 2020.

Not sure what the "everywhere" is that told you to file no matter how much income you received, since that is incorrect.   It seems that you did not ever reach the level of having a requirement to file a tax return for those years.

Who has to file?

http://www.irs.gov/uac/Do-I-Need-to-File-a-Tax-Return%3F

[Opus 17]

@cocob2001 

How did you pay?   If you are using Turbotax online for 2024, you don't pay until you file.  You can pay, and then  not file, and go back to work on your facts, but it is uncommon.

If you bought Turbotax on a CD or download to install on your computer, you have a 60 day money back guarantee.

If you decide to file,

No, you do not enter a 1099-MISC.  That is a form that is sent to you by someone who pays you more than $600 for certain kinds of non-work income (such as gambling prizes).  You would simple enter the miscellaneous income page and enter hobby income not reported on a 1099.

If you did get a 1099 from Rev, it would most likely be a 1099-NEC, and they would only issue one if they paid you more than $600.  Turbotax will default to considering that self-employment.  You can change that to hobby income, but the steps are somewhat different.