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Charlee Coleman

Where should I report self employed income from random side gigs?

So I've been making extra cash on the side doing odd jobs for different people around my neighborhood. Nothing official - no business name or anything like that. Just me helping with yard work, some basic home repairs, and occasionally dog sitting when neighbors go on vacation. They all pay me in cash. I've probably made around $4,200 this year from these little gigs, and I know I need to report it on my taxes, but I'm completely lost on where this type of income goes. I don't have any 1099 forms since it's all cash payments. Does this count as self-employment? Do I need some special form? I've always just had a regular W-2 job before this so I have no idea what I'm doing with this cash income situation.

This definitely counts as self-employment income! You'll need to report it on Schedule C (Profit or Loss from Business) attached to your Form 1040. Even though you don't have a formal business setup, the IRS considers these side gigs as self-employment. Since you don't have 1099 forms, you'll need to keep track of all the cash payments yourself. I recommend creating a simple spreadsheet or even just writing down each payment with the date and amount. You don't need receipts from your clients, but having your own records is important in case of questions later. Remember that you can also deduct any expenses directly related to these side jobs - like if you bought tools for repairs or supplies for yard work. This will reduce your taxable income.

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Do you have to file Schedule C even if the amount is small? I thought there was some minimum threshold before you had to report it. And what about self-employment tax? Does that apply to small amounts too?

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You're required to file Schedule C regardless of the amount if you're self-employed. The IRS expects you to report all income, no matter how small. For self-employment tax (which covers Social Security and Medicare), the threshold is $400 net earnings. Since you mentioned making around $4,200, you'll definitely need to pay self-employment tax, which is calculated on Schedule SE. This is in addition to any regular income tax you might owe.

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After struggling with this exact situation last year, I found this awesome tool called taxr.ai (https://taxr.ai) that really helped me figure out my self-employment reporting. I was doing handyman work and pet sitting, getting paid in cash just like you, and had no idea how to handle it. The site helped me understand exactly where to report my cash income and which deductions I could take for my situation. I was able to upload photos of my handwritten income notes and it organized everything for me. It also walked me through the Schedule C form so I didn't miss anything important.

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Does it actually help with figuring out what expenses you can deduct? That's always the part that confuses me. Like can I deduct mileage if I drive to different houses to do work?

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I'm a bit suspicious of these tax tools. How much did it cost you? And couldn't you just get the same info from the IRS website for free?

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Yes, it absolutely helps with figuring out deductions! It asks you about your specific side gigs and then suggests relevant deductions. For your example about mileage - it would tell you that yes, you can deduct mileage when driving between client locations (but not from your home to the first job or from the last job back home). The value was completely worth it for me compared to the free IRS information. The IRS site has correct info but it's hard to find exactly what applies to your situation. This tool personalizes everything to your specific circumstances and explains things in plain English instead of tax jargon.

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Ok I was totally skeptical about taxr.ai but I gave it a try after my initial comment. I'm eating my words now. This thing actually helped me sort out my side income from tutoring that I've been avoiding dealing with. The interface is super straightforward and asks you simple questions about what kind of work you do. I thought I wouldn't get any deductions at all from my tutoring work but it showed me several that applied to my situation I had no idea about. Ended up saving a decent amount in taxes. The best part was that it explained everything in regular human language instead of confusing tax speak.

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For anyone struggling to get through to the IRS with questions about self-employment reporting, I had a really good experience using Claimyr (https://claimyr.com). After spending literally hours on hold trying to confirm some details about my side income from food delivery, I was about ready to give up. Someone on another forum suggested Claimyr, and they have this system that somehow gets you through the IRS phone tree and holds your place in line. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. When an agent was finally available, I got a call back and was connected right away. Saved me hours of waiting on hold!

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Wait how does that even work? The IRS phone system is always jammed. There's no way to skip the line...the wait is the wait, right?

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This sounds like BS honestly. Nobody can magically get you through the IRS faster. They're understaffed and overwhelmed. I doubt this service does anything special that you couldn't do yourself.

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It's actually pretty clever how it works. The system calls the IRS for you and navigates through all the phone menu options automatically. Then it literally waits on hold in your place. When it detects that an actual human IRS agent has picked up, it calls your phone and connects you directly to that agent. You don't skip the line - the service just waits in it for you. The reason it's helpful is that instead of you being stuck on hold for hours, you can go about your day, and the service will call you when an agent is ready. I was skeptical too before I tried it, but it works exactly as advertised. I was able to get all my self-employment questions answered without wasting an entire afternoon on hold.

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I'm here to eat crow about my comment on Claimyr. I was completely wrong, and I apologize for being so dismissive. After my skeptical comment, I actually tried the service because I was desperate to resolve an issue with reporting my Etsy shop income. I had the same experience as the other commenter - the service called the IRS, waited on hold for over 2 hours (which I didn't have to do!), and then called me when an actual agent was on the line. The IRS agent I spoke with was able to clarify exactly how to categorize my various income streams. Would have taken me multiple attempts and probably a full day of being on hold to get this resolved on my own.

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Just want to add that if your self-employment income is only from these cash jobs and totals less than $43,000 for the year, you might qualify to use Schedule C-EZ instead of the regular Schedule C. It's a simplified version for sole proprietors with simple business situations. But either way, definitely track all your income carefully and save receipts for any expenses related to the work. The IRS can get really picky about cash businesses since there's no paper trail.

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Is Schedule C-EZ still a thing? I thought the IRS eliminated that form a few years ago and now everyone has to use the regular Schedule C regardless of income level.

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You're absolutely right, and I apologize for the outdated information. The IRS did eliminate Schedule C-EZ after the 2019 tax year. Everyone with self-employment income now uses the regular Schedule C regardless of how much you earn or how simple your business is. The form has been somewhat simplified though, so it's not as intimidating as it used to be.

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Quick question - does anyone know if tax software like TurboTax handles this kind of cash income reporting well? Or is it better to use a specialized self-employment tool?

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I used TurboTax last year for my dog walking side gig. It was pretty straightforward - it asks you questions about your business income and expenses, and fills out Schedule C for you. The only annoying thing was that the really helpful features are only in the Self-Employed version which costs more.

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Just wanted to share my experience since I was in almost the exact same situation last year! I was doing landscaping and pet sitting for neighbors, all cash payments, and made about $3,800. You definitely need to report it all on Schedule C - there's no minimum threshold for reporting income, even if it's just $50. What really helped me was setting up a simple notebook where I wrote down every payment as soon as I got it. Date, amount, what the work was for. Super basic but it saved me when tax time came. One thing that caught me off guard was the self-employment tax. Since you made over $400, you'll owe about 15.3% of your net earnings for Social Security and Medicare on top of regular income tax. It's calculated on Schedule SE. But remember you can deduct business expenses - gas for driving to jobs, tools you bought specifically for the work, even supplies for dog sitting like leashes or treats if you provided them. The whole thing seemed overwhelming at first but once I got through it the first time, it wasn't nearly as bad as I expected. Just keep good records and you'll be fine!

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This is super helpful, thank you! The self-employment tax part is what I'm most worried about since I had no idea that was even a thing. So just to make sure I understand - if I made $4,200, I'd owe about 15.3% of that (around $643) PLUS whatever regular income tax applies to that amount? That seems like a lot more than I was expecting to pay. Also, for the business expenses - do you have any examples of what kind of receipts the IRS would want to see? Like if I bought a rake for yard work, do I need to keep that receipt even though it was only $25?

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