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Darned if I do, darned if I don't

February 1st, 2007 at 12:57 pm

Any tax preparers out there?

I'm working a split day today, and since a few more tax statements came in, I decided to start working on the taxes in earnest. I got so far as to go through the "review" feature in TaxAct, where they give you warnings about things you might have left out or done wrong.

"Please note that the IRS has implemented new review procedures for returns reporting more than $400 in other income. The review process may slow the processing of your return." They recommended making sure the income shouldn't fall under business income, and isn't subject to the Self Employment tax.

Naturally, my mind jumps ahead to "more likely to be audited" as well. So I moved my Election Board income onto Schedule C, figuring I could be called an Independent Contractor like DH was when he delivered newspapers some years back. (And doing it this way will be costing us an additional $79 in Self Employment tax.)

But that still leaves about $562 in other income from doing surveys, test drives and trial offers. I don't want to leave it off, because I wouldn't be able to sleep nights worrying that we'd get in trouble over it later. (My fear of the IRS is right up there with public speaking and death!) But if I report it, I'm liable to have trouble anyway because it's over $400. And I honestly don't see where else it could be reported but "other income."

It really reinforces the feeling I have right now, that I want to go to work, get my grocery shopping done with the least fuss, and live my life--instead of looking for deals all the time. The aggravation at tax time is one of the things that make it more trouble than it's worth.

3 Responses to “Darned if I do, darned if I don't”

  1. fern Says:

    You're worried about $500 in other income?? The $$ you make from your surveys and test drives isn't even enough for the payor to have to issue you a 1099; that only happens if a single payor pays you $600 or more in a given year. This money is not even traceable, and not worrying about in my opinion.

  2. boomeyers Says:

    I agree with Fern! Under $600 is the limit to issue a 1099.

  3. LdyFaile Says:

    Ditto Fern. Smile If it's under $600 from a single source you don't have to claim it. They'll send you a 1099 if you need to file it.

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