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Topic: Using check for cashout, need to pay tax?  (Read 792 times)

SweetApril74

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Using check for cashout, need to pay tax?
« on: November 26, 2012, 10:54:50 am »
I am using check for cashout.
I wonder, if i need to pay tax for that?
why or why not?

Please share the infos. Thank you...

swogden

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Re: Using check for cashout, need to pay tax?
« Reply #1 on: November 26, 2012, 06:34:38 pm »
Doesn't make any difference how you receive your FC income, whatever you receive is considered taxable income by Uncle Sam.

However, FC will only send a 1099 to report your income to Uncle Sam  (and to you) when the income that you have received in a given calendar year is equal to $600 or more.

When you request a cash out that will take you over the $600 threshold, FC will ask you to submit a W-9 report that gives them your SS# so the 1099 can be completed.  You may want to defer that cash out into the next calendar year -- unless, of course, you expect to get more than $600 in every calendar year.

When you report the income it is shown on line 21 (Other income).

Whether you report receipts when they total less than $600 is between you, your conscience and your accountant.

FC does not reduce the amount you receive by any withholding tax.   

newgrandpa

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Re: Using check for cashout, need to pay tax?
« Reply #2 on: November 27, 2012, 07:53:18 am »
Good answer swogden. I have been wondering about that 1099 thing.

SweetApril74

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Re: Using check for cashout, need to pay tax?
« Reply #3 on: November 27, 2012, 07:59:22 am »
Thank you for the answer  :thumbsup:

pstovall

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Re: Using check for cashout, need to pay tax?
« Reply #4 on: November 27, 2012, 01:19:41 pm »
Thanks, swogden, for such a clear cut answer to SweetApril74's question.  Tax information is always so complicated!!!  Filling out that W-9 report will now be my new goal!

swogden

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Re: Using check for cashout, need to pay tax?
« Reply #5 on: November 27, 2012, 08:01:17 pm »
You;re welcome!  Glad to know it was helpful.  That's one of the things I really like about FC -- the forum is a great place to get and receive answers -- and they don't always have to be your questions.

TOMAS7

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Re: Using check for cashout, need to pay tax?
« Reply #6 on: November 27, 2012, 10:53:07 pm »
as previously stated, FC won't withhold any taxes and forward them to the IRS, basically we are the same as in independent contractor who would be responsible for their own taxes each year. These payments are not paychecks, but more like if we were contracted labor or self employed so it is up to us to report our earnings and then if over $600 you will get the 1099 which will inform the IRS of what you have earned. This will change your total income from wages and earnings which in turn will change your total taxable income and that is when the IRS will get your taxes due for the earnings from here. If you participate in several sites and don't reach $600 from any individual one, you would need to add all of the earnings together to determine your total earnings from these sources and enter that grand total in order to assure that you have the proper taxes paid to the IRS for these types of earnings. Good luck.

sdenimandlace1

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Re: Using check for cashout, need to pay tax?
« Reply #7 on: November 28, 2012, 05:21:21 am »
Thank you for the great answer.   That will help me rememeber what to do at the end of the year.

amahomes

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Re: Using check for cashout, need to pay tax?
« Reply #8 on: November 28, 2012, 09:05:25 am »
Thank you glad to know it was helpful.  That's one of the things I really like about FC -- the forum is a great place, to get  and receive answers to your questions.

deisha718

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Re: Using check for cashout, need to pay tax?
« Reply #9 on: November 29, 2012, 01:54:11 pm »
This is a great thread.  The information above was very helpful.  Thanks for the tax information.

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