Taxpayer asks:
First of all thanks for some very interesting reading and advice on your site.
I came across this article when searching for information on how to declare some Microsoft software that I ‘earned’ through doing some webcasts.
http://www.taxgirl.com/theres-no-such-thing-as-a-free-lunch/
The value of the gifts/items is $798, as this is over the $600 does the amount over the limit get taxed or just the amount over the limit. I am from the UK and wrestling with Turbo Tax and the American tax system so am at a loss as to what to do with this no so free lunch.
Taxgirl says:
Thanks for reading, I am glad that you find it interesting!
In the US, income is income from dollar one even if you won’t actually end up paying tax on the income. The $600 that you’re referring to is just a reporting limit imposed on the company that made the payment – not the taxpayer.
The taxpayer is responsible for reporting all income. If you actually earned $599, and didn’t receive a form 1099, you’d still be responsible for reporting the $599 as income. If the $798 that you receive constituted income, you must report the entire amount.
You might be interested in some additional taxgirl.com reading on this subject:
basic information about 1099-MISC income and related deductions
income earned with affiliates and advertisers
when to make estimated payments due to income with no withholding
I hope that helps! Good luck with figuring out your taxes. If you want to win some free software from TaxAct, enter my contest!
Like any good lawyer, I need to add a disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet, no matter how well researched or written. Before relying on any information given on this site, contact a tax professional to discuss your particular situation.
Have a question? Ask the Taxgirl!
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Speaking of 1099s, one of the most confusing areas of tax preperation is reporting legal settlements and lawsuit awards. A client comes in with a 1099 from a lawyer, how do we report it?
Jim – I’m going to do a whole post on this. Look for it this week!
Can my company issue more then one 1099 to the same vendor? They have the same FIN for boh vendors.
I’m curious what form you need to file as a small business owner for international vendors paid from a US company? We pay a few contract laborers for “representation” in a foreign country which they are citizens and residents of. How to I report these payments?
I worked at the polls in November. Earned $100. No 1099. No W-2. I cannot figure out where on the 1040 to claim this as income. Do I have to file a schedule C for one day’s work??? And part of it was supposed to cover lunch, so is that another form?
Sounds like a lot of paperwork for a one day job.
No, don’t put it on a separate Schedule C. Just stick in on line 21 as “other income.”