Don’t Forget to Report Your Miscellanous Income!

Taxpayers must report all income they earn and receive in a year on their tax return.  Often times, however, people neglect to report several types of miscellanous income.  The types of income that are often not reported are self-employment income where no 1099-misc is received, bartering income, gambling winnings, and prizes. 

A business owner is only required to send an independent contractor a 1099-misc if the work they did for them exceeds $600 in compensation.  This does not mean that the independent contractor does not need to report the income on their tax return if they do not receive a 1099-misc.  Any income needs to be reported, no matter how small the amount.

Bartering income is also often times not reported.  If you are a small business owner who trades services with another business owner, this counts as income and must be reported as such on your tax return.  For example, if you are a landscaper and you agree to landscape your Accountants yard in exchange for bookkeeping services, then the value of the bookkeeping services are taxable income to you.

Gambling winnings from such things as lottery tickets, horse racing, casinos are also taxable.  Just because you are not issued a W-2G does not mean you are exempt from reporting your winnings.  Gambling losses may be deducted if you itemizes, but only to the extent of winnings.

When you win prizes from things like game shows and contests, the cash value of the prize is considered taxable income to the person who won.  This should be reported as other income on line 21 of your 1040.

If you ever have a question about what income should be reported on your tax return you should discuss it with your tax advisor to make sure you have correctly reported all taxable income for the year.

 

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