Question by Inquisitive: Payments received in 2009 for services rendered in 2010 are to be reported during which tax year?
I am a music teacher. My studio is a home-based business and I am a sole-proprietor.
I received a few hundred dollars in payments in December of 2009 that are for lessons that started in January 2010. Which tax year do those payments fall under?
Thank you.
Best answer:
Answer by Jss
It will be reported on 2009 tax return.
You are self employed or independent contractor. You must file your tax return if your self employed income is $ 400 or more. You will report your income and business related expenses on schedule C or C-EZ (Form 1040). Then you put net income (or loss) on line 12 of Form 1040. This income is subject to SE tax at 15.3% (this is shown on line 57 of Form 1040).
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