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You have to keep track of tax deadlines, distribute your employees’ income statements, and complete your business and personal tax return all at once.
With that in mind, you may slip up and make a few tax errors. Here are some common mistakes and how to avoid them.
If you earned money from a side job and didn’t receive a form 1099-MISC or W-2 form, then you may think you’re off the hook from reporting it on your tax return. Think again.
The IRS requires taxpayers to report all income from any source. Even if it’s from a side job.
In fact, you’ll need to report it as self-employment income on a business tax return (Sch. C).
You might be confused and asking “I don’t have a business-Why would I file a business tax return?” According to the IRS, “All income earned through the taxpayer’s business, as an independent contractor or from informal side jobs is self-employment income, which is fully taxable and must be reported on Form 1040.”
In other words, even if you don’t consider yourself a business owner or self-employed, if you’re 18 years or older, you’ll still need to report income earned from side work as self employment income on a Business Tax Return (even if it’s less than $600).
This includes fees received from;
The first day to file a business tax returns, January 13, falls 18 days before the first day to file 1040 returns (1040 tax filing start date is January 31st). If you need to file a business tax return with income derived from forms 1065 or 1120S , you can today on RapidTax.
Business tax returns accepted by the IRS starting on January 13, include any return on the IRS Business Master File (BMF). BMF returns include the following federal forms:
