Unreported 1099 income almost never goes unnoticed. If you don’t report 1099 income, the IRS will very likely find out. Every 1099 your clients send also goes to the IRS, and its computers match those forms against your tax return. Usually, about a year or two later, you get a letter called a CP2000. It … Read more
An EIN for freelancers is usually optional. If you work alone as a sole proprietor, with no employees, you can use your Social Security number for everything. Even so, most freelancers get one anyway, because it’s free, takes about 15 minutes online and keeps your SSN off client paperwork. You do need an EIN, however, … Read more
Every January, freelancers start receiving tax forms with almost identical names, and the 1099-NEC vs 1099-K question is usually the first one that comes up. For example, you might get a 1099-NEC from one client, a 1099-K from PayPal or Stripe and, occasionally, a 1099-MISC. As a result, it’s easy to assume they’re interchangeable or … Read more