Well, I want to clear something up for everyone. Since self-employment taxes start when you’ve earned $400 or more of self-employment income (doesn’t include W-2 wages), the IRS wants you to report that income as soon as the gross income is at or above $400.
Gross income is the money you receive before any fees or expenses are deducted. So, if I received $300 from a client, that is my gross income. Once I deduct expenses, what’s leftover becomes my net income. Let’s say I have $100 in expenses. My net income would be $200.
Don’t be fooled into thinking that just because your expenses created a loss for the year that you don’t have to report your income!
p.s. Have you heard about my new course for creative entrepreneurs? It’s packed with information that you’ll have lifetime access to! Check it out here.