Texas, Tax return self employed case.. Should I request a 1099 misc from my contractor?
I have a general maintenance company registered and last year I was contracted to do the maintenance of a big house (cleaning the house and mowing the lawn) 2 x per month from Jan to Dec 2010.
She paid me cash every time, She knows what my services are, she is not in the house when I go there to do my job, I am my own boss, she leaves the money in a kitchen drawer and I have the code to get in the house by the garage door, I do not have a fixed scheduled but I have her in my calendar for every thursday)
I want to do my taxes and I do not know how to report my income…
Should I ask her to give me a form 1099 misc?
Will this be of any benefit for her? will it help her reduce her taxable income? (I want to have answers to all her questions just in case before I talk with her?)
Thank you for your help
If the “big house” is a private residence, the owner does not do a 1099-Misc. There’s no deduction for your doing personal services for her.
The IRS uses your records for showing income and expenses.
That said, cash is an issue. If you are single with no dependents, the IRS will not have a problem with the fact you are paying taxes. If you can claim EIC and Additional Child tax credit and get a refund despite the SE tax, the IRS will often come back and ask you to proof you had the money. This is especially true since there won’t be a 1099-Misc.
You’d really be better off if she paid you by check and you photocopied some or all of the checks before deposting them. Alternately, you need to be depositing the cash every Friday.
You don’t need a 1099. Just keep your own records of income and allowable expenses (like supplies for example) and prepare your tax return from your records.
Assuming this is her personal home and not her business, no it won’t affect her taxable income – it’s a non-deductible personal expense.