An Inconvenient Truth: It's income.

June --

I am a Freelance Violinist and Violin Teacher.

Does the rule of not factoring the first $600 of the income from a given "employer" apply to self-employed people?

For example, if I teach a student and had only $599 income from him during a year do I factor that money in anyway?

I realize you've mentioned that indies do not have "employers" but I noticed some of the contractors I played for in recent years did not send me 1099 if the combined income from the gigs did not exceed $600. I would really appreciate clarification in this matter!

Great blog - very helpful.

Unfortunately makes me realize how little I know about the taxes I should be paying... Dominika
Houston, TX


Hello Dominika,

I assume "factoring" is your euphemism for "should I include it as income?

Yes, you should. Any money -- in any form -- that you receive for services performed is income. Intentionally not including income is fraud.

Your students are not your employers. They are your clients or customers to whom you sell your services. If you taught in a school and received a salary from the school, then the school would be your employer.

Anyone who pays an indie $600 or more is supposed to send the indie a 1099-MISC stating the amount of money paid. A lot of people neglect to send any 1099s.

If because your income is under $600 a client doesn't send you a 1099 it is still income. Think of it this way: If you had 100 clients, all of whom paid you $599, you would have earned $59,900. Would you claim zero income?

Dominika, you really need information. I suggest you read these posts 1099s W2s W4s W9s.

You might want to pass on what you learn to alert your fellow musicians. Bands and many music groups tend to get paid in cash and then pay the musicians in cash. The leader then doesn't know or forgets to send 1099s. The band members then conveniently forget that they are supposed to include the cash as income.The inconvenient truth is that all income must be claimed on your tax return.

You can offset that inconvenience by knowing more about legitimate deductions. Check out my book at the library or buy it at a sale price here: Self-employed Tax Solutions . It will give you a basic understanding of indie taxes. It is written like my blog -- which you say you like, THANKS! -- in a clear easy-to-understand style. Educate yourself. You'll feel good about it. It will give you indie-business confidence.

Cheers,
June