A 1099 form or 1099 online is only issued to freelancers who get paid $600 or more. What happens
then if you get paid less than that?
As a general rule or best practice, you as a contractor must keep a record of all your side jobs
and gigs. This will help you be more financially organized and understand how much you’ve made,
and how much you owe come tax time. If, in the unfortunate event that the IRS comes knocking on
your door, you can have proof of income at any given time.
There are many ways to stay financially organized and to track your earnings throughout the
year. First off, you must get in the habit of capturing. To capture your receipts, invoices,
and expenses is a difficult task but there are a few apps out there that can make this much
easier for you.
- Freshbooks App - scans and records receipts on the go
- Abukai - receipt saving app
- Your iPhone - can also scan receipts for you using the notes app
These user-friendly apps can help you keep track of every amount you make or spend so you can
count it as an expense or profit. Make sure you separate your personal and corporate expenses.
Take it one step at a time, get in the habit of gathering your financial details first and
If you choose not to do your own taxes come tax time, and you employ an accountant who does this
for you, then you need to invest in an accounting software as well. Consult with your accountant
as to which software would work best for you and your budget.
Having such a software makes it easier for your accountant to access your files and get things
done quicker. This kind of software allows you to be able to back up your files to a cloud-based
storage. Hooray for saving the environment and decreasing your paper trail!
You will be glad to know that all of these preparations get you in the healthy habit of keeping
and maintaining accurate financial records. This will ensure that you meet and exceed your tax
obligations and filing requirements.
In addition, you do not have to worry about possible penalties or interest for a missed or late
payment. Such unfortunate incidents are for the less organized. You’re playing in the big league
now with these easy tactics.
Businesses must remember to keep a record of certain documents mentioned below and keep them
easily accessible to you. You will need to keep them around for a minimum of 6 years.
- Invoices and receipts - for any services provided by your entity
- Invoices for goods and services for your business
- Bank account statements
- Credit card statements
- Business tax return documents
- Financial statements including profit and loss statements
- Records of payment made to employees (if any)