ok does this sound right?
I clean house for a friend and family member. I make 60 buck a session and 120 bucks a week. I dont send in to SS or insuarance, or anything. I know they pay me cash everytime, but i didnt do recipts. Now i am going to claim it as income so should i just do an Excel spread sheet for every payment? or buy one of those carbon copy tablets an write out all the times they paid me and then submit the carbon to the tax person?
2007-10-12 05:02:46 · 6 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
yah at this time its my only income. I have a sick daughter, that is on MA. I dont qualify for welfare, so I live with family, and pay only a few bills. SO this income is my only source of money. I do not think I will make over 8000$ a year. I do however want to do it all legally.
2007-10-12 17:49:26 · update #1
Law states you have to report all income. If you choose to do so, you can just print it out from your computer using excel or any other invoice template. Just print out a basic invoice form, and hand write the other information (total due, hours, etc.). Then keep a good record of items you used for the job. Keep the receipts you paid for them (soap, sponge, mop). This will be deducted from your income so you pay taxes only on the profit. For example - you get paid $6240 for the whole year. You bought all these cleaning supplies/materials for $2000. 6240-2000= 4240. You will pay income tax +15.3% selfemployment tax on $4240. Which is $1,073. If this is your only income, your standard deduction and exemption will enough to cover this, and you will not have to pay any taxes. If your income is lower than $8000 or so, you dont have to report - unless you want to pay toward your social security.
2007-10-12 05:59:36 · answer #1 · answered by El4teen 2 · 0⤊ 2⤋
Your tax preparer will not ask for your receipts, so you don't need to do carbon copies. If your return is examined, the IRS will want to see your records, so do keep some records. If you want to give your clients a receipt and keep a copy that would be fine. Otherwise, a spreadsheet or calendar on which you have marked the payments would be good documentation.
You will also need a record of any expenses you paid in order to get this income. Those expenses will be deducted from your gross pay, and you will pay SS and Medicare on the net income.
SS and Medicare taxes are not eliminated because you have low income. You will pay these taxes even though you owe no income taxes. For this reason, you are required to file a tax return even though you make less than the filing requirement for employed persons.
You may still get a refund even after SS and Medicare are paid, due to the Earned Income Credit.
2007-10-12 06:27:57 · answer #2 · answered by ninasgramma 7 · 1⤊ 0⤋
Your tax preparer just needs the total, unless there is an under-reporting issue, in which case a list of the dates paid and the amounts might help. No special form is needed.
2007-10-12 05:07:24 · answer #3 · answered by Ted 7 · 1⤊ 1⤋
I'm telling you this from experience. I am self employed and was just audited by the IRS one month ago. They want copies of EVERYTHING!!!!!!!!! So a carbon copy would be the best way to go.
2007-10-12 05:06:59 · answer #4 · answered by elmgirl 3 · 0⤊ 1⤋
A spreadsheet is fine. And if you have related expenses, be sure to track those too.
2007-10-12 18:25:46 · answer #5 · answered by Judy 7 · 0⤊ 0⤋
Why would you wanna claim it..i would think you would wind up paying..There's no proof since you recieve cash and they dont have your ss number.
2007-10-12 05:06:17 · answer #6 · answered by Anonymous · 1⤊ 2⤋