How Much Income Can You Earn Before You Have To Report?
The simple answer is zero. There is no lower limit. The law requires you to report all your income, no matter how small. For example, you start a sole proprietorship during the year, but you get off to a slow start generating only $100 in gross receipts and $90 in expenses. The law requires you to file a Schedule C reporting the income and expenses. Bought a $1 lottery ticket and won $10? You have to report the $10; you can deduct the $1 on Schedule A. There's a lower limit of $10 for reporting and filing 1099s for dividend and interest income and $600 for reporting miscellaneous income you pay, but those are information reporting requirements. Even if you don't receive a 1099 from the bank because the interest you received was only $2, you're still obligated to report the income.
Small Business Taxes & Management
The simple answer is zero. There is no lower limit. The law requires you to report all your income, no matter how small. For example, you start a sole proprietorship during the year, but you get off to a slow start generating only $100 in gross receipts and $90 in expenses. The law requires you to file a Schedule C reporting the income and expenses. Bought a $1 lottery ticket and won $10? You have to report the $10; you can deduct the $1 on Schedule A. There's a lower limit of $10 for reporting and filing 1099s for dividend and interest income and $600 for reporting miscellaneous income you pay, but those are information reporting requirements. Even if you don't receive a 1099 from the bank because the interest you received was only $2, you're still obligated to report the income.
Small Business Taxes & Management
posted by Milt Baker CPA | 7:42 PM
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