If you are self-employed, paid in cash, and make a net profit of $400 or more in one year, you are required to file a federal tax return. Failure to report cash income may result in penalties and fines and prevent you from getting tax credits.
The person who paid you may issue a Form 1099-MISC. This form identifies who you are, how much you were paid, and when you were paid. You and the IRS may both receive a copy. The form is required when someone is paid $600 or more.
Even if you did not receive a 1099-MISC, you should still file a tax return
Filing taxes on cash income is a two-step process:
Free tax preparation help
There are many resources to help you prepare your taxes for free. You can find these resources at Free Tax Return Preparation for Qualifying Taxpayers (from IRS.gov). All the forms mentioned in this article are available at the IRS website, or by calling 1-800- 829-3676.
For any questions or help with any of the above, contact LSNJ’s Tax Legal Assistance Project by calling LSNJLAWSM at 1-888-LSNJ-LAW. You may also apply online.
This information last reviewed: Dec 12, 2018