Q. I worked as an independent contractor in 1991 and at that time, taxes were due on any payment $600 or more. I’m doing this kind of work again and 27 years later, the $600 allowance has not changed while other deductions have gone up. Is that really correct?
A. The $600 is the same. You’re supposed to tell the IRS about the income, even though employers are not required to give 1099s for less than that amount.
The amount isn’t the only thing that hasn’t been updated.
Business deductions have not changed over the years, said Kenneth Begner, a certified public accountant with Sobel and Co. in Livingston.
“You are allowed to deduct expenses that are ordinary and necessary for your business against your independent contractor income,” Bagner said. “The $600 or more can be offset against the ordinary and necessary expenses.”
Bagner said the IRS’ language is very broad, which allows you to include most reasonable items relating to your business — unless Congress has clearly imposed a limitation on a deduction.
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