What would be the minimum reportable income amount for 2004 or today?

Question

If I made money on the side as a fitness trainer, what would have been the minimum amount I could have not declared?

Answer 1

Please note that absent specific facts about your tax situation it is virtually impossible for anyone to give you an accurate answer because there are so many variables involved. Be that as it may:
1. You say that you are “making money on the side.” I am assuming that this means you are employed elsewhere as a fitness instructor and are doing this paid extra activity aside from the work you are paid to do as an employee. As far as the IRS is concerned, you are “self-employed” for this additional paid activity. As such, you are subject to self-employment taxes on your NET self-employment income, i.e., income received from your clients less any reasonable expenses related to making that income. (Think of self-employment tax as similar to the Social Security and Medicare taxes that your employer pays on your behalf as an employee (he pays half) AND what is withheld from your employee paycheck (you pay half). As you are self-employed, you pay all of these taxes on your net self-employment income.) The minimum amount of net self-employment income that is NOT subject to self-employment tax is $399. (This has been the amount for many years and it probably will not change for 2007 either – the IRS has not released anything on this to date.) So to somewhat answer your original actual question, if your earnings (income less related expenses) from your “side jobs” are $399 or less, you would not have to pay self-employment taxes on the earnings or file a Form 1040 Individual Income Tax Return to report these earnings IF these were the only earnings that you had. The IRS form to report and calculate net self-employment income is called a “Form 1040 Schedule C” and you would calculate the self-employment tax on a “Form 1040 Schedule SE.” There is also an easier version of the “Schedule C” form for those with expenses of $5,000 or less – the “Form 1040 Schedule C-EZ.” These additional forms would be attached to the Form 1040 that you normally file. You should take a look at these forms, which are available o the IRS site at www.irs.gov.
2. HOWEVER, you are subject to both self-employment tax AND income tax on your self-employment income. If indeed you are an employee as I suspect you are, you are probably going to file in 2007 to report the wages that will be reported to the IRS by your employer on your year-end W-2. Assuming that these wages are at least $8,450, (the combined total of the standard deduction for a filer whose tax status is single under 65 and one personal exemption which will zero out income of this amount) then you will need to file a return to report these wages AND your net self-employment income regardless of what the net self-employment income is. So, to again answer your original actual question, the amount of taxable earnings any filer can exclude from taxes in any year is generally going to be the amount that will be zeroed out by the applicable standard deduction and personal exemption they are entitled to, and these are based on their tax filing status and age. You can look up what these were for 2004 on the IRS website on the instructions for filing a 2004 1040.
3. You really need to keep in mind that unfortunately any earnings that you make from any type of work must be declared and are subject to tax. This is regardless of whether the payor reports what they have paid you to the IRS. You are still obligated to report your income and pay taxes on it or else be subject to fines and possibly even jail time for fraud. You should really contact a tax pro and get some advice on your situation.

Answer 2

If you had other income and already were filing a return, then every dollar of your side income was required to be reported.

If this was your only income, or you otherwise didn't have enough income to be required to file, then if you made $400 or over of side income, you were required to file a return and report it. This assumes that the side income was on your own, and not something you got a W-2 for.