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Should You Report All Your Freelance Income?

5 March, 2010 (17:17) | Writing | By: Killer

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Photo credit: cohdra from morguefile.com

As freelance writers, we are personally responsible for reporting all of our income, whether the client gives us a 1099 or not. But you may still get that nagging feeling, “If the client doesn’t even have my social security number, how will they catch me if I don’t report it?” That’s a good question that you are probably better off not asking.

Here’s the deal. There are those who are conscientious objectors to war who will give you all sorts of subversive advice on how to evade taxes to avoid financing the death of strangers in foreign lands. Personally, I see paying the taxes I owe as a patriotic duty that shows I love my country enough to contribute to its success. I’m not happy about the war, but if I fail to pay my share, how many mouths will go hungry? How many kids will be cheated from a proper education? It just seems like good karma to pay what I owe. Failing to pay my taxes will not stop the war.

But I can’t expect the same attitude from you. What I can do is lay out all the information so you can make up your own mind.

The Rules

The IRS requires you report all income. If it’s not on a 1099 form, you have to report it as income on Schedule C. Your clients are required to report any income they pay you over $600 and send you the 1099 for your records. Sometimes you might not get the 1099, but don’t assume that means they did not send one. Things do get lost in the mail.

The Risks

If the client sends a 1099 that reports a lower income than you claimed, it will trigger an audit. Even if you did not get a 1099, the client has up to three years to amend the return. Plus, if you don’t provide your Social Security number, the client must withhold up to 31% to cover your tax liability, putting you both in a pickle.

Understand that the IRS is much more likely to pursue you for an audit that some large corporation, even if it’s obvious that corporation is evading taxes. It’s easy and cheap to go through you records. The records of a corporation can take years to sort through for a single audit. The IRS goes for the easy pickings.

That being said, you have to make up your own mind. Is the risk of failing to report all your income worth the reward? You decide.

Top Ten Work at Home Writing Jobs for 3-4-2010

4 March, 2010 (19:28) | Job Hunting | By: Killer

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    Check Out Associated Content’s New Look

    4 March, 2010 (16:09) | Featured Article, Writing | By: Killer

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    I’ve been out of the loop way too long. Today I discovered the new and improved look to Associated Content. Someone there has been talking to Twitter’s designers…

    Confirm Your PayPal Account Now

    The new theme looks trendy but the back-end hasn’t changed much, which is probably why I never noticed the new front page design. Notice I said, “hasn’t changed much.” There is a difference in how Associated Content is handling PayPal paments:

    “We’ve made changes to our payment system that will help us process PayPal transactions more efficiently. As a result, you will need to confirm the email address associated with your PayPal account in order to continue receiving payments for AC. Click the ‘Confirm Your PayPal Account’ link above to confirm now!”

    Be sure to log in and do what needs doing. If you see a red dot with a white minus sign in the upper left corner above your profile, just click on the link and log in to PayPal. You’ll then be redirected to your profile with a confirmation messages saying, “Thank you for confirming your PayPal account!.”

    Increasing Clout, Easy Earnings

    Associated Content is a really great place to get your sea-legs when learning to write on line. When I last logged in, my clout was 2. Now it’s already five. Half way there from doing absolutely NOTHING for six months. Now that I have my head back in the game, I think I’ll be spending a little more time over there. It can’t hurt to spend just a few minutes a day to write something up and see how it does.

    Of all the sites I have written for that share Google Adsense earnings, AC is one of the best. I hold it second only to Helium, and that is because Helium has a more “serious” writing environment and seems to pay better. The downside of Helium is that they won’t tell you how they calculate your earnings. The upsides are two-fold. Earnings are generally higher than any other revenue-share site and the Helium Marketplace has assignments that pay well if you win them.

    So if you have not tried Associated Content yet (or Helium for that matter), get over there and give it a try.

    Regards,
    Killer