So, it’s tax time! Most of people have to file a tax return! How about an income from DT? DT reports any amounts you earned to IRS. DT just isn’t required to send you Form 1099-MISC if your income is less than $599 (Please correct me if this amount was changed for 2008). Anyway, you must file an income tax return if the net earnings are $400 or more (See Publication 17 IRS for more info). You also can deduct expenses which you paid for this business.
How to file? (If you file your taxes by yourself)
This income is not considered a hobby income. Because your purpose is to make a profit. This income is shown on Form 1099-MISC in box 7, Nonemployee Compensation, and must be reported on Schedule C, Profit or Loss From Business, or Schedule C-EZ, Net Profit From Business, even if no Form 1099-MISC is received. Necessary expenses can be deducted from this amount on Schedule C or C-EZ to get the net income. Amount shown in box 7 Form 1099-MISC may be subject to self-employment tax (SE) if the net income is $400 or more. You must file a Tax Return and compute the SE tax on Schedule SE, Self-Employment Tax.
I think that’s really easy!
Photo credits: Iriks.