I’m now realizing I should have, but I also stopped doing signings for a while as I started a full time job. I have reported all my 1099s but the biggest chunk of my signings (with a builder) was not reported to the IRS. I was told because it came out of escrow, they were not required to issue a 1099. I thought I could estimate the mileage but it looks like it’s not an option. Also, I don’t want to put a number only for it to be removed if I get audited and I can’t provide proof. So should I still report this income? It’s around $12,000. I want to do the right thing but also don’t want to be penalized for that.
My understanding, anytime you make more than $600 from any client, they have to (by law) issue you a 1099 (regardless if they are a builder, escrow Co, or not). All your other income outside of 1099’s should be reported as just that, INCOME in addition to any 1099’s you received (minus any state regulated notarial “ACT” fees, as those are tax exempt from IRS). If they use different escrow companies, you “might be” ok, but if they use the same escrow company every time, you should have got a 1099 from that escrow company. I’m not an accountant, but the situation as described doesn’t sound right. In either case, you still need to report any and all your income, especially if they have a record of you providing the service (as most business expenses are a tax write off for them), and/or you gave them a receipt of some sort. I’ll let the “Accountants” chime in on this one further.
One small correction… Notary fees are not Tax exempt from IRS … They are only exempt from self employment tax on one’s tax return
Yes, you are correct, and I stand corrected. (I had it right in my mind)
And @LexiT of course you report that income. You may just have to do some research in tracking down your mileage for the year along with your other expenses…I used to input my signings and mileage into Quicken weekly at the very least and run a report at tax time.
I use Notary Gadget for this, in addition to all my other accounting needs related to the business. It calculates your mileage automatically using GPS based on your travels (address inputs).
Heard good things about that program and about Notary Assist
One signing pays for it for the year. Accountants love it, and it makes it easier to do your own taxes as well.
The best person to ask that question is your CPA!
I say sign up with Notary Gadget for one month input your information ( hopefully you kept your signing offers and confirmations) back date the info to generate the report you need then cancel it. It’s a bit of work but let me tell you as a business owner who was audited 2 times in 20 years ( came out with clean hands BTW) it is not a fun experience. Even when you know you did nothing wrong it can make you paranoid.
Anything over $600 needs to have a 1099 sent to you. You must report all earned income. Failing to report $12,000 in income can result in fines, penalties, as well as Civil or Criminal investigations. I suggest your seek the advice of a qualified Tax Professional.
As for your mileage a Tax Pro can help you figure out how to handle missing milage.
Honestly, $12,000 you could have obtained the services of a good to qualified bookkeeper at $1,500 yearly. My tax preparation fees are $500 per year. Notary Gadget or Notary Assist are $100 yearly. You are going down a rabbit hole not tracking your expenses. The IRS are beefing up audits and small business owners are prime targets due to the lack of business acumen such as having proper bookkeeping & accounting. The IRS don’t care for excuses. You have no way to fight off IRS without documentation. Your lack of business knowledge going to be a downfall. CPA definitely charge pretty hefty when business get into distress with IRS.
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I can’t believe you are asking this question. You have to report all earned income regardless of the amount and regardless of any 1099’s. Breaking the law is never a good thing. Doesn’t your journal show where you performed the services? You can figure out your mileage from that.
You should have been issued a 1099-NEC for any contract you do regardless of the source. Not doing so puts you and them in a tight spot.
If you know the address of the engagement you can use Goole Maps to indicate how far you’ve driven. The key is to have some form of documentation to substantiate your mileage. If you’ve already filed, you can file an amended return to capture your missing mileage.