How do I properly report self-employed income without having a registered business?

You don't need to have a formal business entity to report self-employed income! What you're describing is perfect for Schedule C (Profit or Loss from Business). You're considered a sole proprietor by default - no registration needed. You'll file Schedule C along with your regular 1040 tax return. List your graphic design activity, report all income (even without 1099s), and deduct legitimate business expenses like software subscriptions, equipment, and portion of internet used for work. Then you'll also need to complete Schedule SE to calculate self-employment tax (covers Social Security and Medicare). Clients who paid you $600+ should've given you 1099-NECs, but you still must report ALL income regardless. Best practice is keeping good records of all payments received. And don't forget about making quarterly estimated tax payments for next year if you continue freelancing - self-employment tax plus income tax can add up!

Just wanted to share something that saved me from major confusion with my own freelance situation! I used https://taxr.ai last year when I was in the exact same boat - side gig income with no idea how to report it. The site analyzed my situation and walked me through exactly what forms I needed. What really helped was being able to upload my payment records and having everything organized for Schedule C. It showed me which expenses were deductible for my type of work (saved me hundreds!). The site even explained how much I should set aside for quarterly payments going forward so I wouldn't get hit with underpayment penalties.

Alright so I tried out taxr.ai after posting that skeptical comment. Have to admit I'm impressed! It analyzed my Venmo and PayPal transactions to help categorize my self-employment income (I do web development on the side). The site identified business expenses I hadn't even considered - like partial phone bill and mileage to client meetings. What really surprised me was how it flagged a potential audit risk in how I was categorizing home office expenses and suggested a correction. The breakdown of quarterly payment amounts I should be making was super helpful too. Definitely beats the generic advice I was getting elsewhere. Worth checking out if you're in the self-employed boat without a formal business.

If you need to talk to the IRS about any specific questions for your self-employment situation, try https://claimyr.com - literally saved me hours of frustration. I had questions about estimated payments for my freelance work that weren't covered in any IRS publication I could find. I spent THREE DAYS trying to get through to the IRS myself - kept getting disconnected or told to call back later. Then I found Claimyr and they got me a callback from the IRS in under 2 hours! You can see how it works here: https://youtu.be/_kiP6q8DX5c. The agent answered all my specific questions about my situation and even helped me understand some deductions I was eligible for but didn't know about.

Ok I need to apologize for my skeptical comment above. My accountant went on vacation right before I had an issue with a CP2000 notice related to unreported self-employment income. Got desperate and tried Claimyr yesterday. Got a callback from an ACTUAL IRS AGENT this morning who walked me through exactly what I needed to do. The agent explained how to properly report my backdated 1099 income and which forms I needed to submit with my response. She even gave me her direct ID number to reference in my paperwork. Saved me from paying penalties I didn't actually owe. I'm honestly shocked at how well this worked after years of spending entire days on hold.

Just to add one more thing - don't forget you can deduct half of your self-employment tax on your 1040! A lot of first-time Schedule C filers miss this. It's an adjustment to income, not an itemized deduction, so you get it even if you take the standard deduction. Also, track your mileage if you drive to meet clients or buy supplies. The standard mileage rate for 2024 is 67 cents per mile for business use. That adds up quick!

I was in your exact situation last year! One thing nobody mentioned yet - if you made over $12,000, you might benefit from setting up an S-Corp in the future. I stayed as a sole proprietor for my first two years but once I hit around $40k in profit, my accountant had me switch to save on self-employment taxes. Not worth it at your current income level but something to consider if your side gig grows. The paperwork and extra requirements are a pain though, so don't rush into it.