Is there a maximum amount that you can make as an independent contractor w/o paying taxes?

Question

I got paid $200 as an independent contractor. Do I have to report this to the IRS next tax season, or is there a maximum amount that one can make without having to report it?(e.g., $400, $1000, etc).

Also...although I got directly paid $200, essentially I made -$90. >:( The expenses incurred from completing the project costed me every penny of the $200 that I got paid. In addition, the consequences that resulted from this project resulted in losing hours at work the next day, which costed me $90 from my paycheck. I know I cannot write off the time off from work on my taxes, but the $200 expenses were a direct consequence of going to work on the project.

Answer 1

The simple answer is yes you have to report it and you can deduct expenses against it. You will not have to pay self-employment tax until you have at least $400 net gain.

Call it a hunch (I've been doing this for almost twenty years) but there is something here that tells me your not a contractor. Either you are helping the company or trying to use the company...or this is a bogus post. It is too pefect, you know about part of the law but not the rest of it. Trust me it is easier to find out the answer to your question than is is to find out that you can't deduct lost income.

Answer 2

Since you mention that you have a job - if you are already filing a return, you need to show the side job. If the side job was your only income and was less than $400, you wouldn't have to claim it.

But you also mention expenses for making the $200 - those are deductible against the income. You'll use a schedule C or more likely, C-EZ to show both the income and the expenses, so your net income will be zero and you won't end up owing any taxes on the project.

Answer 3

You have to file that on a Schedule C but you can deduct mileage on your car as long as you CAN PROVE you used it during the course of your employment