If not a professional, but getting paid, do I have to claim it? If yes, how?

[Fireup2020]

Here's the lowdown:

My disorganized housemate wants to pay me to organize her office, set up all online bill pay accounts, organize her properties etc... (and get her 2003-06 tax stuff organized to send to her tax professional - yes, it is truly a disaster!) I LOVE this kind of stuff - but could never do it for a living - how do I keep the invoices, etc straight for my tax purposes? Can I sneak it all under the table? Or just have her deduct it off my rent? I am really not sure what the tax ramifications are for this.

Thanks!

 

[Sam]

Did she ever reported to the IRS about paying you for the service?

 

[SecondCor521]

Legally, if she pays you for the service, you should report it as income and pay income taxes on it. That would be true even if she "paid" you by discounting your rent.

Practically speaking, if it's a one time thing or if she pays you cash and she doesn't provide a 1099 to the federal government, you'd likely float under the IRS radar like all the babysitters and lawnmowing kids and all the folks not paying use tax on their internet purchases. Then all you have to consider is your personal ethics and organizational skills in keeping track of the income.

If you're going to do this for a lot of clients or make a lot of money at it, you may want to look at setting up a Schedule C sole proprietorship. Plenty of info out there on the web.

2Cor521

 

[Fireup2020]

I have been messing with this for 4 hours since yesterday. Probably another 60 -80 hours or so to go...over a period of 4 weeks...

 

[Olav23]

I think if it is under $600, it doesn't have to be reported, but going off memory here....

 

[Anansi]

If you aren't going to report it, then you probably shouldn't post messages about it on a public website.