My wife made some income this year (about 5K) and we are unsure on how to report it. The business owner has not and will not issue W2 or 1099 forms but has written checks to her name which she has cashed out at his bank.

How do we report this on our federal taxes without triggering an audit flag?

After reading Pub 525 from irs.gov, I don't believe she qualifies as "other income" but she believes she does as it is wages not reported on W2. She wants to report it as "Odd jobs".


Thanks,

Thanks alloverlajolla

Mobea

You can claim the income on Schedule C for self-employed and claim any expenses occured. You will pay self-employment tax on the net balance

alloverlajolla

Can I send in the substitute W2 (Form 4852)? Her employer gave her the income amount and has an EIN number but he was unable to figure out how to obtain the W2 form from irs.gov. The instructions seemed complicated.

I am reluctant about filing a schedule C because I don't have all the pay stubs since the checks have been cashed. We do have logs written in a notebook.

Mobea

You can obtain a transcript that will reflect all of the income and taxes that were paid to your wife in 2006 from the IRS by calling them, but you probably won't get them until Oct, Nov or even later. You can always file an extension until you receive the transcripts.

AtlantaTaxExpert

If not W-2 is filed, the IRS has no paper trail, os the transcript will be useless for the uncome in question.

File the Schedule C and give your best estimate as to hw much she got paid. SInce there is no paper trail, it is likely the IRS will accept it at face value.