Tax question?

[WDWAurora]

Ok, I will be asking our accountant this later, but I was just trying to get an idea now. DH is anxious about it, and driving me nuts. So here's the situation:

DH did some side jobs with a coworker. He made less than 10K (way less) on these jobs and was paid entirely in cash. Each job paid a very small amount, it just added up to a nice little bonus for us over the course of a few months. The coworker who managed these jobs did not keep a record of paying DH, and did not file any taxes on DH's part (not sure about his own).

Now, I don't in any way want to cheat on our taxes. I just don't know how to even report this? Is it a low enough amount to not have to report?

So...any ideas? Like I said, we'll let our accountant make the final decision, I just want to be able to tell DH something to calm him down! He's been high strung this week between taxes and having our floors done and I just want to calm him down a little.

 

[dizluvah]

I believe (but am by NO means an expert) self employed income is taxable income and it would be added to the wages DH earned at his "real" job and taxed accordingly (at whatever tax bracket/rate the combined totals put you in)

 

[mefordis]

He was supposed to be paying estimated taxes on this income throughout the year. I know this because I am a self employed contractor and I pay estimated taxes twice a year to avoid penalties. The government wants their money up front. They don't like to wait. I think anything less than $1000 does not require a 1099 but you will need the guy who gave your husband this work to issue you a 1099.

Please let me know what your accountant says. I want to know if I am wrong

I'd like to add that maybe your husband should ask the guy who hired him if he is going to report this on his taxes. It seems to me if he has a business he could take deductions, depending on what your husband was hired for. But if he is not reporting it to the IRS, and you don't report it to the IRS, I don't think there is any way for them to know he even made this money. Though please don't think I am encouraging you guys to do this!

 

[CF'er]

Yes. He should be issued a 1099 and he would be taxed. BUT if there is no record and the "employer" didn't file it then it sounds like found money. Cash under the table if you will.