Tax Information

This is correct. If you ONLY file as self-employed you must file if you've made more than $400 and if you do what is considered 'contractor' work you have to file if you make more than $600 for any one company.

 

I have not. I've been an 'independent contractor' for the same company for 5 years now so I don't have to fill out anything special I just file. I've not made enough from any one requester to need to do individual forms at this point so I'm not going to stress it. From what I've read here and there a lot of requesters cut you off when you're close to $600 so they don't have to bother with sending out the forms etc.

 

This is to clarify the issue the best I can. My experience is limited to being a tax preparer for a number of years under an Enrolled Agent. That designation is well regarded as one of the most knowledgeable because they are able to communicate with the IRS directly, have to be re-certified annually with continuing ed. from the IRS, and can even represent you to the IRS on your tax situation without you having to be present when attorneys aren't even afforded that privilege. see- http://www.irs.gov/Tax-Professionals/Enrolled-Agents/Enrolled-Agents---Frequently-Asked-Questions

However one important thing to bear in mind is that tax rules and statutes are often changed, amended or even discarded each tax season therefore it is recommended that Publication 19 and the irs.gov website in general be consulted for the final say.

 

As stated on the webpage irs.gov

'You have to file an income tax return if your net earnings from self-employment were $400 or more. If your net earnings from self-employment were less than $400, you still have to file an income tax return if you meet any other listed requirement in the Form 1040 instructions'

See - http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center

The $600 W9 http://www.irs.gov/pub/irs-pdf/fw9.pdf is their (the business paying the income) obligation to the IRS. They still all report any and all funds paid out as a business expense unless they've got some other strategy going on for them not to take that deduction. This does not address the independent contractors obligation to the IRS.

Ultimately, if in doubt as to how to address your individual circumstances regarding tax obligations, it is your responsibility to consult a professional (Enrolled Agent, irs.gov, IRS directly, or an Accountant/Cpa or Tax Attorney) knowledgeable in tax preparation/filings. Something I learned was that not all CPA's, Accountants, Tax Preparers etc. are experts in proper tax filings no more than you are from studying the IRS materials, so ask them if that is a part of their area of expertise before taking their recommendations as gospel.

 

Do I still have to pay taxes if all I do is get cool stuff from Amazon?

 

You're still making money as an independent contractor so I imagine yes if you make over $400 you have to file.

 

Technically if you win a new car in a game show or something you have to pay taxes on the car. It doesn't matter if it's stuff or money, if it's gambling or working, it's still "income" to the IRS.

You may not have to pay taxes on your turking if you make below a certain amount, but it's still a good idea to file taxes on it anyway. By filing taxes on it you prove to the IRS "hey look, I made some money but the money isn't enough to be taxed so don't tax me!" By not filing, the IRS can say "hey, we see you made some money... give us some." AKA an audit. They can technically audit you for not reporting tips if you're a waitress or the $5 you won on the lotto. Do you report all your tip wages and all your gambling income? All the money you make selling stuff on eBay? The quarter you found on the street yesterday? Probably not, but you should, because you can technically be audited for that.

Technically. But, it's really rare for the IRS to audit people with small incomes. It costs them several hundred dollars in man hours and paperwork to audit someone, so if they can't get at least X amount of money out of someone, they probably won't audit you. They can. But they probably won't. Most people (realistically) don't report their gambling or tip income. I'm not sure, but most small-time turkers probably don't report their turking income either. You should, and you're legally obligated to. But you'll have to decide if a bit of paperwork and possibly paying taxes is better than the risk of audit and/or jail time for tax evasion.

 

An example from gambling: if you make a jackpot bigger than $1200, you have to fill out tax forms at the casino. Some casinos have jackpots of $1199 for this reason. If you make $1199 or less, the tax form never gets filled out, never reaches the IRS, and so they can't trace the money to you, and therefore can't (easily) audit you (since they don't have evidence you have the money). But you're still supposed to (honor code!) report that $1199.

So, with the turking: if you make $600 from a single requester, they have to fill out the tax form and link you to that money. The IRS finds out. If you make less than $600, odds are the IRS will never be able to trace that money to you, just like the small time gambling money. But you're still supposed to (honor code!) report that $599.

 

$599.99 =-P
Thanks TomBombadill, that was a lot of great info.

 

Good info however $599 figure for SE incorrect according to provision. W-G (Gambling) $599 is treated slightly different from W-9 (Independent Contractor) $400. Then a W-2 (employee earned income) is also treated differently.

An individual may find that they may need to file all three or more in some cases. It's judged on how the IRS identifies you. Hint... It does not apply to SE with $400 in income.

I posted some other information in the thread with a few links to the irs webpage. All this information is available on irs.gov

Things to remember. You are treated for tax purposes based on how you are identified under the provisions. You may have multiple obligations for instance if you 1. work for an employer 2. receive self-employed income ($400-net) 3. have gambling profits ($599) 4. get paid working at a church ($108) 5. investments etc.

Guys just use Turbo Tax and forget about losing sleep on this. It'll walk you through the steps. H&R and the others wouldn't have any business if it wasn't for people being confused about taxes. irs.gov has a questionnaire you can fill out regarding some of your questions.. http://www.irs.gov/uac/Do-I-Need-to-File-a-Tax-Return?

Also check this out on page 5 its quite interesting regarding filings.

http://www.irs.gov/pub/irs-pdf/p501.pdf

 

Moved it to this thread.

Anyone here with $400 or more in self-employed incomefor 2012? Well Uncle Sam is waiting to hear from you by April 15th 2013! And from what I hear he doesn't like to be Stood Up!!! So word of advice to all. File or not to file that is your choice, however I've worked in taxes and have been a Schedule C/SE filer for some years. The IRS is a slow moving bureaucracy and I've seen them wait YEARS for them to get around to folks to have their chance at giving them pure HELL!!!

So if you plan on being in the system generating income, do it right. If you plan on being destitute for the rest of your life and never ever own shit, then hey, I can understand someone not giving a damn.

 

I thought mturk work was a 1099-MISC not a W-9? Either way, yes, each form goes on a different line, and each type of income is treated differently (your tax rate on turking may be different than your "real" job or any investment income you have, for example). I was just using gambling as an example to illustrate how the IRS reporting works.

Part of the reason taxes are so confusing (and H&R and others are in business) is all the acronyms, code names (W2, W4, 1099, 1040A, etc), and numbers (I have to add and take percents?!?). People are scared of math but they shouldn't be. People who are familiar with tax code should make what they're talking about clear (which you did, specifying what the W-G and W-2 is, but it took me a minute to realize "SE" was "self-employment") to people who aren't. Really, taxes aren't that hard (unless you own a business, farm, or rental property; then they get a little messy). Anyone with a high school diploma should have the math and reading ability to do it themselves, it's just a matter of "translating" all these form names and protocols to normal every day speech (which H&R and others won't let happen; they like it to be confusing so people will pay them) and taking the time to sit down and do it (reading all the instructions and punching numbers into your calculator).

I advocate better tax education and doing it yourself over Turbo Tax or whoever else, but that's just my two cents. I understand people are busy and don't have time to learn/do their own taxes, and it's easier to give it to someone else.

 

Tax talk seriously makes my brain hurt. This is why I pay someone to do my taxes.. because the IRS is one thing I won't fool with LOL

 

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I've received a 1099 from CW for the past 2 or 3 years, plus I have some earnings from other requesters and other jobs, just not enough to receive a 1099. My spouse has a little extra tax taken out each week. This covers my SE earnings so I don't have to do the quarterlies. I claimed SE even before it was mandatory for mTurk to send out 1099s and this has worked for me. I am usually within a few dollars +/- of what's due.

Also, you can take deductions against your earnings. You can claim the percentage you use your computer for SE purposes. I claim 75% business and 25% personal. You can claim a new computer, printer, repairs, supplies etc. Just don't fall into the hole of claiming home/office. That's a big red flag for an audit.

 

So if anybody knows what forms do I need to fill out to do my taxes for 425 in earnings.