Self Employment Recordkeeping Tax Tidbit
By Cora ParksWhat's the worse that can happen at tax time with your records? Neither you nor your payer have any.
Self employed individuals are not entitled to a Form 1099 Miscellaneous (MISC) unless their earnings exceed 600. Even then, some employers may still not give them. Follow the information listed above to contact IRS in the same manner as a wage earner for a W-2 form to make a report. Warning: in your case, it is very important to keep exact records of your earnings, especially if you don’t receive a 1099 MISC. The reason is that there are some employers that are dishonest enough to misrepresent, and in some cases even downright fabricate the amount of money that they paid you in order to write off a higher expense amount on their own income tax returns. If you are unlucky enough to encounter one of these individuals, make sure that you can substantiate what you were paid by good record! keeping. This way, if the employer provides false information to the IRS that they will rely on (as far as the IRS is concerned), the employer has less incentive to misrepresent their income than you, the one who has to pay the tax on the income.
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