Last year I did a one-time consulting gig for a flat $720 cash, untaxed. All I have is the stub from the check. So how the heck do I report this? I’d just add it to my total income but I have no W-2 to attach since I wasn’t actually an employee of the company. I don’t own a business, this was just a one-time favor. I’d just ignore it but I have a moral hangup about doing that.
Anyone know how I should address this? I’ve checked the IRS web pages and still feel very unsure what to do. Should I just add it in to my wages?
Ask the person who you consulted for furnish you a 1099-MISC form. You would give him/her your EIN# (if you have one) or your SS# instead. Also give them your name and adress for the form. They should have furnished you this by the deadline, which is today (1/31/06) for any combined payments to you totaling over $600 (I still think this is the current threshhold) for the 2005 tax year. The 1099-MISC form is similar to an additional W-2 form which is mostly used by consultants, independent contractors, and other non-employees of the payer.
I am not your tax professional, and this is not my area of specialty. You should consult an experienced tax advisor for a real answer to this question for your situation.
That being said, there’s a line “other income” that I used last year to put the $15 per day that I got for jury duty. I wouldn’t put it in the wages line, because the IRS expects to have your wages agree with the W-2 forms you get.
If you had a consulting business, or expenses to deduct against the income, you could fill out a Schedule C or C-EZ, but that might be going overboard.
Actually, ignore what I previously said. The Form 1040 instructions (Page 29 for Line 21) say you have to use a Schedule C or C-EZ.
[quote=IRS Form 1040 Instructions]
Do not report on this line any income from self-employment or fees received as a notary public. Instead you must use Schedule C, C-EZ or F, even if you do not have any business expenses. Also do not report any non-employee compensation shown on Form 1099-MISC. Instead, see the chart on page 15 to find out where to report that income.[/qupte]
Ok, I see Billdo and I are giving different answers for different parts of the reporting of this $720. My reply was in regards of what responsibilities the payer has towards you w.r.t. filing and giving you a copy of the 1099-Misc form. (Box #7 would be the where the $720 should be listed on the form). That should have been given to you by today. A copy of that 1099-Misc. should be filed by that payer to the IRS by 2/28/06 or 3/31/06 (Depending on the type of media used). So when you file on you 1040, you would include that 1099-Misc along with your W-2(s) and the IRS should be able to match those copies with what they have by 4/15/06. Billdo is pointing out WHERE that $720 should be listed on the 1040 form, which is completes the whole process of the reporting the income.
I just use TurboTax. It asks if I have any other income. I tell it what the income is and where it came from. It fills out the appropriate forms. No big deal. Well worth the twenty bucks for the software.
[QUOTE=Billdo]
Actually, ignore what I previously said. The Form 1040 instructions (Page 29 for Line 21) say you have to use a Schedule C or C-EZ.
You do not have to use Schedule C unless you are in the business of consulting on a regular basis. If you do use Schedule C you will likely owe self-employment tax on your net self-employment income after related expenses at the rate of approx. 15% in addition to the income tax on it. If you can get the net below $400 you don’t owe self-employment tax.
If not in a trade or business you can report it on the other income line on the front page. I’d attach a scedule referring to it as “one time only” services or something to that effect.