Eric Posted July 20, 2012 Report Share Posted July 20, 2012 Disclaimer: As I'm sure you're all aware, I am not a tax professional. A friend of mine did a little bit of work writing some copy for a website project I was working on. It was a very small job--the invoice he sent to the client was for less than $500. He's paranoid about the IRS coming after him, so he wants to report the income, but he would also like to avoid the hassle of complicating his otherwise simple tax return. I offered to ask for suggestions about how to report the income as simply as possible, so here I am. Quote Link to comment Share on other sites More sharing options...
Margaret CPA in OH Posted July 20, 2012 Report Share Posted July 20, 2012 Well, bless his honest heart! And it is reportable income although, because it is less than the $600 reporting threshold, he may not receive a Form 1099. If he is not in the business of writing copy, he could report it on Line 21 of Form 1040 as Other income but, because it is over $400, it is subject to Self Employment tax so he would also file Schedule SE. If he had any expenses related to this income, he may instead be better off with a Schedule C-EZ, not too complicated if the expenses are easy, and Schedule SE. If he is truly not in this business, he may just report it on Line 21 and pay only income tax, not self-employment. As always, it depends and you will likely receive other suggestions, too. 1 Quote Link to comment Share on other sites More sharing options...
Catherine Posted July 20, 2012 Report Share Posted July 20, 2012 Eric -- I concur with Margaret. If not part of his regular business, Line 21. If it is his regular business (has a job writing copy but this was outside his employment), then definitely Schedule C (or C-EZ). Expenses (including mileage) for this job push him towards Schedule C-EZ rather than Line 21. 1 Quote Link to comment Share on other sites More sharing options...
JohnH Posted July 20, 2012 Report Share Posted July 20, 2012 I agree. If he has any direct expenses to deduct against the income, maybe he will be able to reduce it (using Schedule C-EZ below the threshhold for paying Self Employment tax. His chances of this income causing an audit or other problems with IRS are almost zero. 1 Quote Link to comment Share on other sites More sharing options...
Eric Posted July 21, 2012 Author Report Share Posted July 21, 2012 His day job is as a technical writer, so I guess that does apply here. Thanks for the help! Quote Link to comment Share on other sites More sharing options...
Terry O Posted July 21, 2012 Report Share Posted July 21, 2012 I agree with the Sched CEZ - -it really is easy to figure out. 1 Quote Link to comment Share on other sites More sharing options...
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