I am often asked, "If I make less than $600, do I need to report my income to the IRS?"
The answer is that $600 is the threshold for the business owner to provide form 1099-NEC or 1099-Misc to them and that, even if the form is not filed, that income must be reported.
In fact, Internal Revenue Code section 61 lists all income that is taxable, unless otherwise exempt, regardless of amount, sections are as follows:
(a) General definition. Except as otherwise provided in this subtitle, gross income means all income from whatever source derived, including (but not limited to) the following items:
(1) Compensation for services, including fees, commissions, fringe benefits, and similar items;
(2) Gross income derived from business;
(3) Gains derived from dealings in property;
(4) Interest;
(5) Rents;
(6) Royalties;
(7) Dividends;
(8) Annuities;
(9) Income from life insurance and endowment contracts;
(10) Pensions;
(11) Income from discharge of indebtedness;
(12) Distributive share of partnership gross income;
(13) Income in respect of a decedent; and
(14) Income from an interest in an estate or trust.
For items specifically included in gross income, see part II (sec. 71 and following). For items specifically excluded from gross income, see part III (sec. 101 and following).
Bottom line: if you receive income, it is generally taxable, regardless of amount.
Should you have any questions about the taxability of income or receipts, please see your tax professional.
(Taken from IRC section 61)
The answer is that $600 is the threshold for the business owner to provide form 1099-NEC or 1099-Misc to them and that, even if the form is not filed, that income must be reported.
In fact, Internal Revenue Code section 61 lists all income that is taxable, unless otherwise exempt, regardless of amount, sections are as follows:
(a) General definition. Except as otherwise provided in this subtitle, gross income means all income from whatever source derived, including (but not limited to) the following items:
(1) Compensation for services, including fees, commissions, fringe benefits, and similar items;
(2) Gross income derived from business;
(3) Gains derived from dealings in property;
(4) Interest;
(5) Rents;
(6) Royalties;
(7) Dividends;
(8) Annuities;
(9) Income from life insurance and endowment contracts;
(10) Pensions;
(11) Income from discharge of indebtedness;
(12) Distributive share of partnership gross income;
(13) Income in respect of a decedent; and
(14) Income from an interest in an estate or trust.
For items specifically included in gross income, see part II (sec. 71 and following). For items specifically excluded from gross income, see part III (sec. 101 and following).
Bottom line: if you receive income, it is generally taxable, regardless of amount.
Should you have any questions about the taxability of income or receipts, please see your tax professional.
(Taken from IRC section 61)