Claiming Wages

[wdmmom]

Hi Tom,

I'm wondering if I have to claim wages that are above and beyond the amount due. For example, I have it in my policies that any overpayment will be considered a gift. I have a family pay me $5 extra about 12 weeks out of the year. Should I add that into what they've paid me and claim it on taxes or can I actually consider it a gift?

And what about late fees? Do I have to claim them as wages even though it is above and beyond their contracted rate?

Lastly, how do I show a loss? I also sell beauty products on the side and this year I actually ended up losing roughly $200 due to new shipping fees they charge. Previously they used to charge $.75 for each customer ordering. Now it is a standard ship fee of $5.95, $6.95 or $9.95 depending on weight. So if I only have one or two people order, I have to pay out of my own pocket on any additional shipping fees above and beyond my commission.

Thanks!

[TomCopeland]

Originally Posted by wdmmom

Hi Tom,

I'm wondering if I have to claim wages that are above and beyond the amount due. For example, I have it in my policies that any overpayment will be considered a gift. I have a family pay me $5 extra about 12 weeks out of the year. Should I add that into what they've paid me and claim it on taxes or can I actually consider it a gift?

And what about late fees? Do I have to claim them as wages even though it is above and beyond their contracted rate?

Lastly, how do I show a loss? I also sell beauty products on the side and this year I actually ended up losing roughly $200 due to new shipping fees they charge. Previously they used to charge $.75 for each customer ordering. Now it is a standard ship fee of $5.95, $6.95 or $9.95 depending on weight. So if I only have one or two people order, I have to pay out of my own pocket on any additional shipping fees above and beyond my commission.

Thanks!

First, any money a parent pays you is not a "wage" because you are not their employee.

Any parent overpayment is income, it's not a gift. This money was for child care services. Any late payments are income.

Treat the selling of beauty products as a separate Schedule C business. Show and income and expenses for that business on that form. Transfer the loss onto Form 1040, line 12. Showing a loss once in awhile is okay, but not on a regular basis.