You can usually expect the IRS to charge a late payment penalty of 0.5% per month for as long as late taxes are unpaid. If the IRS finds that you owe additional tax on your unreported 1099 income, it will usually notify you and retroactively charge you penalties and interest beginning on the first day they think that you owed additional tax, according to Intuit TurboTax. Because the 1099 you receive is also reported to the IRS, the tax agency knows about your income - even if you forget to include it on your return. The one thing they all have in common is that they cover payments you receive that are potentially taxable. Failing to do so could cost you a lot of money in penalties and late fees.Īs noted on the Intuit TurboTax website, there are many different kinds of 1099 forms (and dozens of situations that might call for one). Even if you didn’t receive a Form 1099 on income you earned, you still need to report the income. All of these income sources need to be reported on your tax return. That doesn’t even include 1099 income earned on interest from savings accounts, cancelled debt, and other sources. See: 6 Types of Retirement Income That Aren’t Taxableįind: 3 Ways Smart People Save Money When Filing Their Taxes Whether you’re a small business owner, independent contractor or someone with a bunch of side hustles, you might have dozens of different payees sending you 1099 forms during tax season. One of the challenges facing gig workers is keeping up with different sources of income during the year - and remembering to pay taxes on all of them.
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