Q. A friend of
mine says I do not have to pay tax on amounts received if it is under
$600. If that is true I have been
overpaying my taxes for several years.
Is that true?
A. This is
probably one of the most repeated tax myths out there. So, let me clear it up
for you quickly: income is income, no matter the amount. The threshold for
required reporting from the payor is $600; which means that if payments are at
least $600, a federal form 1099 must be issued. Some folks believe that if no
1099 is actually issued, you don’t have to report it. That’s not true. You have
to report all of your income, from whatever source, on your tax return unless
it’s otherwise excluded.
