3 Things You May Not Realize You Must Pay Taxes On
When tax time arrives, you likely gather all of the tax forms you receive from your employer, and head to your local tax professional. While preparing your taxes, you will be asked if you have any Miscellaneous Income to report. While your answer may be “no”, you might be surprised by some of the items you may be required to pay taxes on—such as the 3 items mentioned below.
If you post household items online on eBay, sell crafts on Etsy, or offer freelancing services—you are required to report your income. In fact, if your online income results in even a couple hundred dollars each month, you may be surprised to learn that you have a substantial amount of tax you must pay on this year’s income. However, you may also qualify for new deductions related to your online income, such as office supplies.
Financial Prizes And Gifts
If a friend or family member has gifted you a large amount of money, or if you have won a large financial prize—such as cash, a new car, or a new home, you may be required to pay taxes on your gifts and prizes. The amount of the gift or prize will determine what you are required to pay.
Just as you may be required to pay taxes on prizes and gifts, you may also be required to pay taxes on your gambling income. Depending on how much money you gamble, you may be able to offset your taxable gambling income with your annual gambling investment.
If you have income this year from online auctions, online income, financial gifts, or gambling—reach out to Roanoke tax professional Micah Fraim today at (540) 314-0345 to ensure that you are accurately informing the IRS of all of your Miscellaneous Income.