Most people are not aware that they may be required to report income earned from Fiverr, and other online platforms, to the IRS. The reason for this is that the IRS considers this type of income to be self-employment income. This means that if you earn more than $400 in a year from Fiverr or other online platforms, you will need to file a Schedule C with your taxes.
The Schedule C is used to report profit or loss from a business that you operate as a sole proprietor. This includes businesses that are online-based, such as those operated through Fiverr.
When reporting your income on the Schedule C, you will also need to pay self-employment taxes. These taxes consist of Social Security and Medicare taxes, and are calculated at a rate of 15.3%.
If you are new to paying self-employment taxes, you may be wondering how to go about it. The good news is that you can make quarterly payments using Form 1040-ES. This form can be found on the IRS website, and allows you to estimate your taxes for the year ahead.
Paying self-employment taxes can be a bit of a hassle, but it is important to remember that this money goes towards your retirement and health care. So, even though it may be a pain now, it will benefit you in the long run!
Conclusion: In conclusion, it is important to remember that if you earn income from Fiverr or other online platforms, you may be required to report this income to the IRS. This is because the IRS considers this type of income to be self-employment income. If you earn more than $400 in a year from online platforms, you will need to file a Schedule C with your taxes.
When filing your Schedule C, you will also need to pay self-employment taxes. Even though paying self-employment taxes can be a bit of a hassle, it is important to remember that this money goes towards your retirement and health care.
