sidework

[Truthineyes]

I will serve as a consultant on a project besides my regular job and the total earnings will be above $2,000.

I wonder how to report this extra income to the IRS. I did some research online and found info about 1099-NEC. I wonder if I need to inform the organization which contracted with me to send me the 1099-NEC or if they should do it without me mentioning it. Also, if the organization for whatever reason cannot offer such a form, what should I do?

Thank you

[AmitaR]

Hello Truthineyes,

It doesn't hurt to ask the organization to make sure you will be getting this form (Form 1099-NEC).  Even if you don't get that form, you are still required to report this taxable income.  Also, keep track of any expenses you may have related to this income, you will be able to deduct them. You will be able to report this income in your TurboTax  Income section, under the Business Income and Expenses.  You may want to update your W-4 form and have additional withholding from your regular job to cover for taxes on this income and not have to send in Quarterly Estimated Tax Payments. 

Thanks.

[Truthineyes]

Thank you for your responses.

The side job will occur in Nov and Dec of 2023. 

Some more to think:

1. If I receive the 1099-NEC, do I still need to submit a W-4

2. Would you explain more about the difference between W-4 and Quarterly Estimated Tax Payments? For the latter. to whom should I send in?

Thank you

[AmitaR]

Hello Truthineyes,

So 1099-NEC reports your Non-employee compensation.  You have two options to pay tax on this income:

• You can pay the Quarterly Estimated Tax Payment.  The next one is due 1/15/2024, or
• You can update your W-4 at your regular job and have them take out additional withholding to cover for this additional income so that you don't have to make this Quarterly Estimated Tax Payment. 

For the federal tax, you can just go to irs.gov, Make a Payment, and put in your details... you may need to create an account on the IRS website, if you don't already have one. 

For the state tax, check you state tax website.