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?
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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