Tax Season 2012: Work No Longer Pays

[FreshFish]

Re: Tax Season 2012: Work No Longer Pays

95% sure that's treated as regular income.

edit: "hypothetically" speaking, it is reported on Schedule C as income from a sole proprietorship, and you also can deduct related business expenses. "Hypothetically" speaking, we also are "supposed to" report barter in lieu of cash as well

[dxmnkd316]

Re: Tax Season 2012: Work No Longer Pays

We're also supposed to report online purchases to our states so we can pay sales taxes on the purchase price.

[unofan]

Re: Tax Season 2012: Work No Longer Pays

Here's a hypothetical...

If I sell a few tickets on StubHub for above face value, is that profit taxable? What if I do that a few hundred times and clear a few thousand dollars.

Hypothetically.

hypothetically, you should report it as regular income. Just as you should any gambling winnings, even if you don't win enough in a single bet to qualify for, or otherwise weren't given, a W2-G (because you won that money at a table game, for instance).

You can offset any gambling winnings with gambling losses, too, provided you keep a regular journal of gambling activity or otherwise have proof you lost what you claim you lost.

All hypothetically speaking, of course.

[FlagDUDE08]

Re: Tax Season 2012: Work No Longer Pays

The stock broker decided they were going to wait until March 15th to send a 1099.

[unofan]

Re: Tax Season 2012: Work No Longer Pays

The stock broker decided they were going to wait until March 15th to send a 1099.

If you know what it's going to say from transaction confirmations or quarterly statements, you can prepare it all ahead of time and just use the 1099 to double check it.

[FlagDUDE08]

Re: Tax Season 2012: Work No Longer Pays

If you know what it's going to say from transaction confirmations or quarterly statements, you can prepare it all ahead of time and just use the 1099 to double check it.

That's what I planned. Unfortunately, I need distribution factors for my royalties (such as depletion, taxes they pay, things like that) and the companies themselves don't even have those.

And, of course, they plan to keep changing on me, so 1040X may be in my future.

[FlagDUDE08]

Re: Tax Season 2012: Work No Longer Pays

OK, question:

With the royalty trust stocks I own, I am able to calculate the depletion and get the royalty income down to a loss. However, for this activity, do I need to fill out Form 6198? I didn't do it last year (mostly because the amount of money I deducting was likely too small for the IRS to care, not to mention they did get a good-sized check in the mail though not enough to pay a penalty), but I wonder if I'm cheating by not filling it out. Worse comes to worse, I could always just not claim some of the depletion and have 0 income on royalties.

[Hammer]

Re: Tax Season 2012: Work No Longer Pays

I would not say that you're "cheating". But I would file one just to be safe. If nothing else that's one less red flag from an audit standpoint.

[bottomdweller]

Re: Tax Season 2012: Work No Longer Pays

If I were to fill out a W-9 to do design work for a company, and make a couple thousand in a year doing so, should I be expecting any type of tax document from said company to report the earnings? Or how do I go about paying taxes on said income?

[FlagDUDE08]

Re: Tax Season 2012: Work No Longer Pays

I would not say that you're "cheating". But I would file one just to be safe. If nothing else that's one less red flag from an audit standpoint.

Never mind, I figured it out, just by RTFM. I have to fill out Form 6198 if I have royalties for which I am not "at-risk". According to the instructions for Form 6198, oil/gas exploration constitutes an "at-risk" activity, so I'm good to not include it.

[FlagDUDE08]

Re: Tax Season 2012: Work No Longer Pays

If I were to fill out a W-9 to do design work for a company, and make a couple thousand in a year doing so, should I be expecting any type of tax document from said company to report the earnings? Or how do I go about paying taxes on said income?

If you filed a W-9, you should expect a W-2. According to the 1040 instructions:

Missing or Incorrect Form W-2? Your employer is required to provide or send Form W-2 to you no later than January 31, 2012. If you do not receive it by early February, use TeleTax topic 154 to find out what to do. Even if you do not get a Form W-2, you must still report your earnings on line 7. If you lose your Form W-2 or it is incorrect, ask your employer for a new one.

Hopefully you kept tabs on your earnings so you are able to report accordingly.

[Hammer]

Re: Tax Season 2012: Work No Longer Pays

If I were to fill out a W-9 to do design work for a company, and make a couple thousand in a year doing so, should I be expecting any type of tax document from said company to report the earnings? Or how do I go about paying taxes on said income?

If you filed a W-9, you should expect a W-2. According to the 1040 instructions:

Not quite. If you filled out a W-9, you should receive a 1099. If you filled out a W-4, you should get a W-2.

[FlagDUDE08]

Re: Tax Season 2012: Work No Longer Pays

Not quite. If you filled out a W-9, you should receive a 1099. If you filled out a W-4, you should get a W-2.

Ah. I know with the 1099's, they were supposed to come out this past week (although for some dumb reason my stock broker decided to delay until next month). You should have them soon, bottomdweller. If not, you don't actually have to submit any forms, just report the income appropriately.

[FlagDUDE08]

Re: Tax Season 2012: Work No Longer Pays

hypothetically, you should report it as regular income. Just as you should any gambling winnings, even if you don't win enough in a single bet to qualify for, or otherwise weren't given, a W2-G (because you won that money at a table game, for instance).

You can offset any gambling winnings with gambling losses, too, provided you keep a regular journal of gambling activity or otherwise have proof you lost what you claim you lost.

All hypothetically speaking, of course.

This is actually one advantage to using the casino comp cards (and obviously can be a disadvantage if you don't report). I did hear about a guy that got a W-2G for having one large day of winning. He then went to the casino, got the report on his losses, and wrote it off.

[Hammer]

Re: Tax Season 2012: Work No Longer Pays

Ah. I know with the 1099's, they were supposed to come out this past week (although for some dumb reason my stock broker decided to delay until next month). You should have them soon, bottomdweller. If not, you don't actually have to submit any forms, just report the income appropriately.

That's the most important part right there. Report the income you did receive, regardless of whether you got a form. So many people think that because they didn't get a W-2 or 1099, that income is not subject to tax. Now, if we're talking minimal amounts here, you're probably going to get away with that. But if you're audited, one of the first things the IRS asks for is bank statements. They're going to look at how much money went through your accounts. If you've reported $40,000 in gross receipts/wages, and the IRS sees $65,000 worth of deposits, you've got some explaining to do, and it better be good. Remember: Cash. Leaves. Tracks.