I receive payments for work that I do online through paypal. I will have made well under $1000 by the end of the year. I have no other job. How will I file my taxes? I am usually used as a dependent on someone else's taxes, but will not have tax forms this year, so what do I do? Also next year I will doing the same line of work and will probably make around $10,000 will this change anything besides being able to be counted as a dependent? Please help. I don't want to mess up my taxes.
2006-09-08 13:11:43 · 4 answers · asked by Sniggly_Snew 2 in Business & Finance ➔ Taxes ➔ United States
OK, first things first... if you are under 19, or under 22 and a full-time student in college, you can still be claimed as a dependent, regardless of your income.
With that in mind, I will assume that you are being paid as a "contractor" or a "consultant". You are being paid for some service. right? If you are selling a product via eBay, it's pretty much the same thing.
If that is the case, then you will have to get form 1040 and schedule C, and schedule SE from the IRS... These forms are downloadable from IRS.gov. You will also need appropraite state froms from your home state, if your state has a personal income tax.
From there, its a matter of filling out the forms and following the instructions.
You should save your receipts from paypal, and if you paid any expenses other than commuting, you should save receipts for those as well... You categorize the receipts like schedule C... and you fill out the forms.
You are effectively a small business. you can also dowwnload a booklet about small businesses...
A simpler solution might be to get a copy of TurboTax, and follow the onscreen menus to complete your return... It's not as hard as you might think.
If you have any specific questions, please feel free to email me.
2006-09-08 13:37:28 · answer #1 · answered by boj12345 2 · 0⤊ 0⤋
The only thing you need to claim is if any one particular entity paid you $600 or more, and issued a 1099, which also gets claimed on their taxes.
Anything under $600, without a 1099, the IRS would have no way of tracking... unless you actually show a loss, wherein you want to get money back - which you can do for 3 out of the first 5 years in business.
However, as an independent contractor, if you do owe taxes; you're also responsible for sending in tax payments quarterly, otherwise the IRS will fine you.
2006-09-08 22:49:58 · answer #2 · answered by ♫☼♥ ≈ Debbi ≈ ♥☼♫ 3 · 0⤊ 0⤋
The best way is to get someone to do them for you. It's alot less headache that way and the people that file them for you know about the govt and know just what they are doing. If they mess up its on them not you. I take mine to a lady that is very well known in my area, she does them each year for people and because she works out of her home office she charges 80% less then what they charge at those well known places. Good Luck. I would never do mine myself, for fear of messing up.
2006-09-08 20:21:06 · answer #3 · answered by ♥ Lips of Morphine ♥ 4 · 0⤊ 0⤋
Did they give you 1099 forms? You file a 1040-EZ either with paper or through the Internet.
http://www.irs.gov
2006-09-08 20:17:42 · answer #4 · answered by Anonymous · 0⤊ 0⤋