TOLEDO, Ohio (WTVG) – Small business owners, independent contractors, or anyone who receives income through digital payment applications are required to report all income over $600 on their return. taxes due to the CARE Act signed into law in 2021.
This is a change from last year, when the income reporting limit for digital applications was $20,000 or 200. There are still some ways to keep extra cash in your pocket, and it all comes down to getting rid of it.
“What expenses can I legally deduct that would help me generate this income?” says Thomas Baird, a certified public accountant. “So for example, if you get one for $20,000, it’s probably going to be 10 to 12 thousand dollars in expenses…. mileage, you know, equipment, those types of things. If you did, and you include them in that Schedule-C, you won’t get taxed on it. you can take it.”
Houston Grant, owner of Houston’s Happy Tails, said he offers digital payments for the convenience of his customers but with the new law, it’s harder to separate the revenue from the service and tips he might give. his customers.
“I know we have to pay our taxes like everyone else, I feel like we’re compared to the big box stores where we get the bottom line,” Grant said.
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