Does freelancing count as a second job as far as taxes go? (CA)

September 10, 2009 12:25 AM

Sometimes I get small job requests that come from outside my fulltime job. They don't pay much (barely over 1k this year) but it's enough to require me to report myself as a business. Does that mean it's a second job?
posted by mallow005 to Work & Money (10 answers total)

You don't say where you live, so we'll assume the US. I am not a tax expert. That said, I believe you have to report income above something like $650. Now if you want to do this by the book you'll need to get a 1099 from whoever is paying you. They'll have to submit it to the IRS, you'll have to submit it to the IRS, so on and so forth. However, if they forget to report paying you to the IRS then nobody knows they difference.
posted by quadog at 12:42 AM on September 10, 2009

I live in CA, I put it in the title.

Really? Everyone has to give me a 1099 even though they pay me about 30 - 100 dollars? Do you have to give your gardner a 1099 too? Does that mean I'll have about 10 1099s to report? Is each one another job, or is my "business" count as one job?
posted by mallow005 at 12:49 AM on September 10, 2009

Income is income. What I do is file a Schedule C or C-EZ with federal taxes, plus a schedule SE if there's more than $400 income. All quite easy (until you start deducting expenses).

Schedule C has a space for indicating the industry (for statistics, presumably, as it doesn't affect your taxes).
posted by zompist at 1:07 AM on September 10, 2009

I believe the cut off for the payer being required to provide a 1099 is $600. If you earn less than that from a single source, they are not required to file a 1099.
posted by COD at 5:51 AM on September 10, 2009

COD is right. HOWEVER, that rule is for the payer, not the payee. not having a 1099 does not mean you don't have to pay taxes on that income. It just means they aren't required to give you a 1099 for it.

Where do you see the requirement that you have to report yourself as a business?
posted by gjc at 7:02 AM on September 10, 2009

The last time I worked as a 1099 and made over 1k and did my own taxes, I just put my name down as the name of my "business". Basically a sole proprietor.

And guys, of course I'm going to report my income. I am not asking if I need to report my income, I'm just wondering if freelancing for many different people counts as an extra job in addition to my fulltime job, or does each client count as another job? I'm just trying to use the W-2 Calculator and it asks me how many jobs I have.
posted by mallow005 at 10:07 AM on September 10, 2009

My understanding is the number of jobs that you have is irrelevant from the IRS's perspective; the only reason that the calculator is asking you is to figure out how many 'income form job x' blanks to show. What matters is the total income and the total amount of deductions withheld in each category of taxes.
posted by bsdfish at 10:13 AM on September 10, 2009

I see, thanks!
posted by mallow005 at 10:22 AM on September 10, 2009

Yup, second job, not relevant. Income, relevant. 1099's relevant. IRS doesn't care where the income comes from if it's earned, as opposed to gifts, trusts, interest, etc.

I know a lot of people who figure no 1099, don't report it. That's not legal, but it's common practice. Few of my clients provide me with 1099's but I report all my income regardless. Yeah, I am a dunce. But I am not in trouble with the IRS.
posted by Xoebe at 1:04 PM on September 10, 2009

Each individual client is a separate job and the income from that one source must add up to $600. The clients are not all clumped together as one job. Each one of them would file a 1099 if they paid you $600 or more.
posted by VC Drake at 2:00 PM on September 10, 2009