According to the Internal Revenue Service, every U.S. citizen is required to report all earned income and pay associated taxes. This includes money earned from odd jobs, even ones that are cash-only or considered “off the books.” If you don’t pay all required taxes, you could be subject to penalties and fines.
Keep written records of all the odd jobs you perform. Write down the date of the job, the employer, the hours worked and the amount paid. If you submit an invoice for payment, keep a copy and create a ledger or spreadsheet that allows you to input whether you’re paid by cash, check or some other means.
If you’re doing extensive odd jobs for the same individual or company, you may be asked to fill out tax paperwork for that entity that declares you an independent contractor. Your odd-jobs employer will issue you a tax form at the end of the year that makes it easier for you to accurately file your taxes. If you earn more than $400 annually through odd jobs, you may find tax benefits in classifying yourself as a sole proprietor and filing your taxes under this designation. You may also be required to pay self-employment taxes using Schedule SE Form 1040. See IRS publication 533 for details and filing tips.
File Your Tax Return
List each of the odd jobs and the amounts earned during a tax year on your annual tax return using Schedule C or C-EZ. The IRS Self-Employment Tax Center can help you identify the correct forms to use based on your earnings and your business incorporation status, if you have one.
Deduct Work-Related Expenses
You may qualify to take deductions related to the odd jobs you perform to help you offset your tax burden. For example, if you perform odd gardening and landscaping jobs, you may be able to deduct expenses related to tools you buy and use in your trade. Keep records and receipts to help you validate your deductions.
Penalties for Not Filing
If you don’t include odd jobs on your tax return or claim the income from them, you could get caught and fined. This is especially likely if the person or company who hired you reports you on their return as a contracted employee. Keep your finances and taxes on track by reporting all forms of income.
Lisa McQuerrey has been an award-winning writer and author for more than 25 years. She specializes in business, finance, workplace/career and education. Publications she’s written for include Southwest Exchange and InBusiness Las Vegas.