I've been offered a contract job at a law firm, but I'm not sure I'm going to accept. My main problem is with the fact that it's a contract job. My question is this, do you have to declare all the money you make at a contract job, or is there a limit below which you could fail to declare and be safe from the IRS? I'm not sure why I'm thinking it's less than $1,000.
You have to declare it all, as long as you made, in total, enough to be required to file a return that year.
If it's more than $600 you'll more than likley get a 1099. Legally you are suppose to claim allincome but if it's below $600 it would be very tough for the IRS to find out you made the money since no 1099 would be issues.
RM95, Something else to add. When you are working a contract job and get a 1099, then your FICA will double from what it would be if you were an employee. If you were an employee, you would pay around 7.5% in fica and your employer would basically pay the same. However, if you are contract, its like you are self employed. Thus, you will end up paying around 15% in FICA on top of your normal taxes.
Yeah, that's why I'm asking. I worked a contract job for the last three months of 2001 and I found this little piece of information out when I did my taxes. I'm just wanting to see if this job is worth it for me to go to Austin for a week. Thanks again.
OK, what if they sent a 1099 regardless of the fact that it was under $600? I'd then have to file one right?
call 866-455-7438. This is the IRS line dedicated to answering questions about w-2s and 1099s. Free information.
Correct, you would then have to pick it up on your return. However, they are not required to send you one unless (as stated above) the amount is over $600. You are actually required to report it as income regardless of the amount and regardless of if you get a 1099-MISC. You would owe roughly 15.3% in employment taxes and then also have to pay FIT on it at your regular rates.
