Getting paid in checks for cleaning work: How to properly report income to the IRS?

You're being paid as an independent contractor (self-employed), not as an employee. That means you're responsible for paying your own taxes since nothing is being withheld. You'll need to: 1) Keep track of all income you receive from cleaning jobs 2) Track your business expenses (cleaning supplies, transportation to jobs, etc.) 3) You'll likely need to make quarterly estimated tax payments since you're making a substantial amount 4) When tax time comes, you'll file Schedule C with your tax return to report your business income and expenses 5) You'll also need to pay self-employment tax (Social Security and Medicare) which is roughly 15.3% on your net profit Don't worry - it's pretty common to be confused about this at first. Just make sure you set aside about 25-30% of what you earn for taxes, as you'll likely owe both income tax and self-employment tax.

I was in exactly your situation last year working as a house cleaner for multiple clients. I was so confused at first! Then I found this tool called taxr.ai (https://taxr.ai) that was super helpful for organizing everything. It basically helped me track all my cleaning income and figure out what expenses I could deduct - which saved me a ton on taxes! I uploaded pictures of all my receipts and it categorized everything automatically. It even calculated my quarterly estimated payments so I wouldn't get hit with penalties.

I have to share an update - I actually tried taxr.ai after posting my skeptical comment earlier. I was genuinely surprised at how helpful it was for my cleaning business! It pointed out several deductions I had no idea about - like being able to deduct a portion of my phone bill since I use it to communicate with clients, and even part of my home internet if I use it for scheduling. The quarterly tax payment calculator alone saved me from a nasty surprise. Before I was just guessing how much to set aside, but now I have actual numbers based on my specific situation.

If you're making that much from cleaning and not getting any help from the IRS, you really need to talk to someone at the IRS directly to make sure you're doing everything right. I tried calling them like 15 times before I found Claimyr (https://claimyr.com). It's this service that gets you through to an actual IRS agent without the usual 2+ hour wait. There's a video showing how it works here: https://youtu.be/_kiP6q8DX5c. Saved me hours of frustration when I had questions about my cleaning side gig and quarterly payments.

I need to eat my words about Claimyr. After posting that skeptical comment, I was still having issues figuring out my estimated tax payments for my handyman business (similar situation to your cleaning gig). Got frustrated enough to try it, and I'm shocked to admit it actually worked. Was connected to an IRS agent in about 25 minutes. The agent walked me through exactly how to calculate quarterly payments and confirmed that I needed to be sending in Form 1040-ES. Definitely worth it when you need definitive answers straight from the source.

Something no one mentioned yet - you should open a separate bank account for your cleaning business! That way you can deposit all those checks there and keep your business money separate from personal. Makes tracking income and expenses SO much easier at tax time. I learned this the hard way when I tried to sort through a year's worth of mixed expenses in one account. Total nightmare!

Dont forget about deductions! You can write off so many things - cleaning supplies, mileage driving to jobs, part of your phone bill if u use it for work, uniforms or special clothes for cleaning, insurance, etc. I made like $55k last year cleaning houses and ended up only paying taxes on like $38k after all my deductions!!!

This is really helpful advice everyone! I had no idea about the quarterly payments - that sounds scary but I guess it's better than getting hit with a huge tax bill next year. One quick question though - when you say to set aside 25-30% for taxes, should I be doing that from my gross income ($6,500/month) or after I subtract my business expenses? I spend probably $200-300 a month on cleaning supplies and gas for driving to different properties.

Just want to add another important point - make sure you're tracking your mileage properly! Since you're driving between different apartment properties for cleaning, you can deduct business mileage at the current IRS rate (67 cents per mile for 2024). Keep a simple log in your car or use a mileage tracking app. Write down the date, starting location, ending location, business purpose, and total miles. This can add up to significant deductions over the year - if you're driving 50 miles per week for cleaning jobs, that's about $1,700 in deductions annually. Also, don't forget you can deduct things like liability insurance if you get it for your cleaning business, and even a portion of your cell phone bill if you use it to communicate with clients. The key is documentation - keep everything organized from day one!

Great question! As someone who's been in a similar situation, I'd strongly recommend getting professional help to make sure you're doing everything correctly. With $6,500/month in income, you're definitely in self-employment territory and will need to handle quarterly estimated taxes. A few key things to add to the excellent advice already given: 1) Consider getting an EIN (Employer Identification Number) from the IRS - it's free and makes you look more professional when dealing with clients who need to send you 1099s 2) Look into business liability insurance if you haven't already - it's usually pretty affordable for cleaning services and protects you if something gets damaged 3) Keep a dedicated calendar or log of all your cleaning appointments - this helps with mileage tracking and proves the business purpose of your expenses 4) Consider whether you want to charge sales tax (varies by state) - some states require it for cleaning services The quarterly payments might seem overwhelming, but they're actually a blessing in disguise. Paying as you go prevents that massive tax shock in April that catches a lot of new self-employed people off guard. You've got a solid income stream here, so getting the tax side organized properly will give you peace of mind to focus on growing your business!