It is my understanding that one can earn up to $600/yr. without having to pay taxes on that amount. I believe they call this 'incidental income'. The key factor is what is REPORTED to the IRS. Yes, a company you do a little work for and don't exceed the $600 limit from that employer is not required to report your earnings to the IRS, but they may do so anyway. So don't be under the impression that you are 'safe' in not reporting/claiming all your income. This is something to keep in mind if you are doing 'incidental earning' with several payors that may not report your earnings currently, but could do so at anytime in the future! Remember that what they send you is a business expense for them so it is not realistic for them not to report your pay at some point.
Another big consideration is your bank's reporting to the IRS. Even if you get your payments in checks and just cash them at the bank makes you 'safe' so you might think. That is the least 'risky' for tax reporting, but just because the banks are not REQUIRED to report such activity does not mean that they can't. The key here is that as this economy continues to flounder and the FED is priniting money like crazy there is nothing 'normal' today.
Just thoughts on matters, do be mindful of how you deal with the IRS... personally I don't put anything past a tax collector!!
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Topic: Tax (Read 7049 times)