Do I need to report side job income under $600 if my employer reported it to the IRS anyway? Will they just throw it out?
Title: Do I need to report side job income under $600 if my employer reported it to the IRS anyway? Will they just throw it out? 1 I recently picked up a small gig doing social media management for a local business on weekends. Total pay for the year was only $475, so well under the $600 reporting threshold. I wasn't expecting to get any tax forms since it's below the limit, but I just received an email from the business owner saying they went ahead and reported my earnings to the IRS anyway "just to keep their books clean." Now I'm confused about what I need to do. If the employer wasn't required to report this income but did anyway, what does the IRS actually do with this information? Will they just disregard it since it's below the reporting threshold? Or do I now have to include this on my taxes even though it's under $600? Does this somehow increase my audit risk if I don't report it? Any insight would be super appreciated as I'm trying to get my taxes done this weekend!
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Miguel Diaz
8 Even though the reporting requirement for businesses only kicks in at $600, all income is technically taxable regardless of amount. The $600 threshold is just about when a 1099 form is required to be issued - it's not an exemption from paying taxes on that income. Since your employer did report it to the IRS, the IRS now has a record of that income tied to your SSN. They won't "throw it out" - they'll expect to see it reported on your tax return. If you don't include it, there's a chance their automated matching system will flag the discrepancy, which could potentially lead to questions or even an adjustment notice. The good news is that reporting $475 in additional income likely won't dramatically change your tax situation, especially if you had other income. Just include it on your Schedule C if it was self-employment income or line 8z of your 1040 if it was miscellaneous income.
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Miguel Diaz
•12 Wait, so even if I make like $100 selling stuff on eBay, I'm supposed to report that too? I thought anything under $600 was a free pass! Does this apply to like everything - babysitting, lawn mowing, all that small stuff too?
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Miguel Diaz
•8 Yes, technically all income is taxable regardless of amount. There's no minimum threshold for what counts as taxable income. The $600 threshold is just about when businesses are required to issue tax forms. For small amounts like $100 from occasional eBay sales, it gets a bit more nuanced. If you're selling personal items for less than you paid for them (at a loss), that's not considered taxable income. But if you're buying things to resell at a profit, that is taxable, even in small amounts. And yes, technically babysitting, lawn mowing and other small jobs are all taxable income.
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Miguel Diaz
15 So I was in almost the exact same situation last year! I did some freelance graphic design work and only made about $520, but got completely confused when tax time came around. I spent HOURS going down internet rabbit holes until I found this tool called taxr.ai (https://taxr.ai) that actually helped me figure out exactly what to do. I just uploaded my 1099 and answered a few questions, and it clearly explained that I needed to report the income even though it was under $600. The tool even calculated my self-employment tax and showed me which forms I needed to fill out. Ended up saving me from what would have definitely been a headache if the IRS had flagged the mismatch!
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Miguel Diaz
•3 Did you need to fill out a full Schedule C for such a small amount? And did you have to pay the self-employment tax on that little bit of income? Seems like a lot of extra work for less than $600.
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Miguel Diaz
•7 I'm a bit skeptical about these tax tools. Did it actually handle this specific situation correctly? I've found most tax software gets confused with edge cases like this.
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Miguel Diaz
•15 Yes, I did need to complete Schedule C, but it was pretty simple since I didn't have many expenses to deduct. The tool walked me through it step by step, so it wasn't nearly as complicated as I expected. For the self-employment tax question, I did have to pay it, which was a bit of a bummer. Even small amounts of self-employment income are subject to both the employer and employee portions of Social Security and Medicare taxes, which works out to about 15.3%. Not a huge amount on $520, but still something to be aware of.
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Miguel Diaz
7 Follow up on my skepticism - I tried taxr.ai after posting that comment and wow, I was wrong! It actually does handle these "gray area" situations really well. I had a similar issue with some small consulting income, and the tool specifically addressed whether I needed to report income under $600 (yes) and walked me through exactly how to report it correctly. What I really liked was how it explained WHY I needed to report it, not just that I had to. Turns out the IRS matching system is much more sophisticated than I realized. Definitely using this for my taxes this year instead of taking chances.
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Miguel Diaz
19 If anyone's struggling to get answers directly from the IRS about these types of situations, I'd recommend trying Claimyr (https://claimyr.com). I had a similar issue last year with unreported income and couldn't get through to the IRS for weeks. Claimyr got me connected to an actual IRS agent in about 20 minutes who confirmed that yes, all income needs to be reported regardless of amount, and explained exactly how to handle it on my return. You can see how it works in their demo video: https://youtu.be/_kiP6q8DX5c Saved me hours of hold music and frustration, and probably saved me from getting a letter from the IRS down the road too!
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Miguel Diaz
•5 How does this even work? I thought getting through to the IRS was basically impossible during tax season. Is this service just setting up callbacks or something?
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Miguel Diaz
•2 Sounds scammy. Why would I pay someone to call the IRS when I can do it myself for free? I'm highly skeptical that anyone can actually get through to the IRS faster than just waiting on hold.
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Miguel Diaz
•19 It's not setting up callbacks - they use a system that navigates the IRS phone tree and waits on hold for you. When an agent actually picks up, you get connected immediately. It saved me about 2 hours of hold time. It's definitely not a scam. I was skeptical too until I tried it. Think of it like having someone wait in a long physical line for you - you only show up when it's your turn. The IRS doesn't prioritize their calls; they just handle the waiting part so you don't have to sit there listening to hold music for hours.
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Miguel Diaz
2 I need to eat my words about Claimyr. After posting my skeptical comment, I decided to try it because I was desperate to talk to someone at the IRS about some unreported income issues. I was absolutely shocked when I got connected to an IRS representative in about 15 minutes! The agent confirmed exactly what others have said here - all income must be reported regardless of the $600 threshold, and they actually do match even small amounts that have been reported by businesses. They recommended filing Schedule C if it's self-employment work (which mine was). Would have spent at least 2-3 hours on hold otherwise. Sometimes it's worth admitting when you're wrong!
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Miguel Diaz
9 Tax preparer here. Just to add some clarity: The "under $600" confusion is one of the most common issues I see with clients. The $600 threshold only determines whether the PAYER must issue a 1099 form. It has absolutely nothing to do with whether YOU must report the income. All income from any source is legally required to be reported on your tax return, even if it's $5. The IRS computer matching system will catch discrepancies between what's reported by others using your SSN and what you report on your return, regardless of amount.
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Miguel Diaz
•17 But realistically, would the IRS really come after someone for not reporting a tiny amount like $50 or $100? I mean, they must have bigger fish to fry, right?
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Miguel Diaz
•9 While the IRS certainly focuses more resources on larger discrepancies, their automated matching system doesn't discriminate based on amount. I've had clients receive notices for discrepancies as small as $83. The issue isn't that they're "coming after you" for small amounts - it's that their system automatically flags mismatches. Once flagged, it can trigger notices, potential penalties, and interest on the unpaid tax. The headache of dealing with IRS correspondence typically far outweighs the small amount of tax you might owe on minor income. Plus, establishing a pattern of accurate reporting helps if you're ever selected for audit for other reasons. Better to report everything properly than risk complications over small amounts.
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Miguel Diaz
4 Does anyone know if this applies to stuff sold on Facebook Marketplace too? I sold some old furniture and made maybe $400 total last year. No 1099 forms or anything, just cash and Venmo. Do I seriously need to report that??
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Miguel Diaz
•10 If you sold personal items for less than you originally paid for them (like used furniture), that's not considered taxable income - it's actually a personal loss. You only need to report income from selling things if you made a profit compared to what you originally paid. For example, if you bought a couch for $800 and sold it used for $300, that's not taxable income because you sold at a loss. But if you bought items specifically to resell them at a higher price, that would be taxable no matter the amount.
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