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You Got This Weekly Series: Should Self-Employment Income from More Than One Business Be Reported as One Income or Separately?

You Got This - TaxACT

Each week we will answer one of the most frequently asked questions on FacebookTwitter and TaxACT’s Blog in the “You Got This” Weekly Series.

Question:

Do self-employed, not as in owning their own business, but as representatives of companies like Avon and Mary Kay, need to report their income separately on their tax return or can the multiple incomes be combined as one?

Brian via Facebook

Answer:

You are required to report the income of each business separately on your tax return. You do this by completing a separate Schedule C, Profit or Loss from Business, for each business activity.

What qualifies as a separate business?

Each activity carried on to make a profit is considered a separate business.

Let’s say you are an independent sales representative for two companies, Mary Kay and Avon. You will report your income and expenses for the Mary Kay business on one Schedule C. The income and expenses for the Avon business will be reported on a second Schedule C.

Do I need to report the income if I didn’t make much money?

If your only income is from self-employment and the total net earnings from all activities is less than $400, then you are generally not required to file a tax return.

If you are required to file a tax return, you must report all of your net earnings from self-employment, whether it’s $1 or $1 million.

This is true even if you don’t receive a Form 1099-MISC.

Each company that pays you $600 or more is required to issue you a 1099-MISC. If you earned less than $600 and didn’t receive a 1099-MISC, you must still report your income on Schedule C.

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