Self-employed income reporting to IRS - when does the $600 threshold apply?

The $600 threshold is just about when someone has to issue you a 1099-NEC form, not whether you need to report the income. All income is technically taxable regardless of amount, and you're supposed to report it even if you don't receive a form. That said, going over $600 won't suddenly make all your income taxable - it's already taxable. The only difference is paperwork. And don't worry about "bumping into a higher tax bracket" - our tax system is progressive, so only the dollars in the higher bracket get taxed at the higher rate, not all your income. For your tutoring income, you'd report it as self-employment income on Schedule C. You'll pay regular income tax plus self-employment tax (about 15.3% for Social Security and Medicare). But you can also deduct legitimate business expenses like supplies, transportation to tutoring sessions, etc. So don't turn down income just because of taxes! You'll always net more money by earning more, even after paying taxes on it.

I had a similar situation last year with some freelance writing I was doing. I was super confused about the tax implications until I found taxr.ai (https://taxr.ai) - it was a game changer for me! I uploaded my income docs and it showed me exactly how much I should set aside for taxes on my side hustle income. The nice thing is that it breaks down both the income tax and self-employment tax clearly, so I could see exactly what I'd owe. It also helped me identify deductions I could take for my home office and supplies that I hadn't even considered. Might be worth checking out since you're new to the US tax system.

Just wanted to update that I tried taxr.ai after seeing it mentioned here. Super helpful for my DoorDash situation! I was actually keeping way too much aside for taxes (was setting aside 30% when I really only needed about 22% based on my specific situation). The breakdown of self-employment tax versus income tax was really eye-opening. It also showed me that tracking my mileage was saving me a ton - I hadn't realized how valuable that deduction was!

Regarding your question about tax brackets - I had the same worry last year! What helped me most was calling the IRS directly to ask about my specific situation. I used this service called Claimyr (https://claimyr.com) that got me through to an actual IRS agent in about 15 minutes instead of waiting on hold for hours. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The agent explained that I should absolutely take the additional income and not worry about "tax thresholds" messing things up. She walked me through exactly how the progressive tax system works and confirmed that I'd always come out ahead by earning more. Really cleared up my confusion!

OK I need to eat my words. After posting that skeptical comment, I decided to try Claimyr because I've been struggling with a missing refund issue for months. It actually worked exactly as described - I got a call connecting me to an IRS agent after about 25 minutes (instead of the 3+ hours I spent on my previous attempts). The agent was able to find my refund in their system and confirm it's being processed but was delayed due to a verification issue. Would have never gotten this info without actually speaking to someone. Definitely worth it for complex tax questions that need a real IRS person.

Going back to the original question, one thing no one mentioned is that if you're doing tutoring, you might want to set aside 20-25% of that extra income for taxes. Since it's self-employment income, you'll owe both the employer and employee portions of Social Security and Medicare (self-employment tax). I tutor on the side too and what I do is just put 25% of each payment into a separate savings account so I'm not surprised at tax time. Better to have a little extra saved than not enough!

One more thing to consider - keep track of ALL your tutoring expenses! That includes: - Miles driven to tutoring sessions - Books or materials you buy - Portion of internet/phone used for tutoring - Any online subscriptions for teaching resources These all reduce your taxable income from tutoring. Even if you go over $600, good expense tracking might mean you pay very little tax on that income!

As someone who went through this exact situation when I first moved to the US, I completely understand the confusion! One thing that really helped me was realizing that the US tax system is actually pretty straightforward once you understand the basics. Since you're already earning $98K from your university job, your tutoring income will likely be taxed at your marginal rate (probably 22% federal plus state taxes if applicable) plus the 15.3% self-employment tax. So roughly 35-40% total depending on your state. But here's the key insight: don't let the tax tail wag the income dog! Even if you pay 40% in taxes on that extra $165 ($750 - $585), you'd still net about $100. That's $100 more than you'd have by turning down the work. The beauty of our progressive system is that earning more never results in you taking home less money overall. Each additional dollar is only taxed at the marginal rate, not your entire income. My advice: take those extra tutoring sessions, set aside about 35% for taxes, and don't stress about the $600 threshold. It's just a reporting requirement, not a tax cliff. Good luck with your first US tax season!