How to report on Eqip babysitting income and employer income that never sends a W2 form

SECURITY CLEARANCE Q&A
#1

I have no idea how to report my babysitting side job money. According to Venmo, because it is less than $20K I earned babysitting, I don’t need to file.

Also, I had a job 7 years ago that never sent W2 forms for the 2 years I was there. I never thought about it until now. I was young and naive and didnt think I could file without a W2. This is not an independent contractor job. I never reported it. Now do I have to say that I failed to file on Eqip? It was an honest mistake and never thought about it. Is that a crime? If anything I plan to amend before my eqip is due. I dont know the exact amount I made though because the records only go back 2 years ago. :frowning: afraid I wont even make it.

#2

How old were you when you were paid under the table? The idea that you don’t need to file because you made less than $20k is not correct. I don’t care who told you. It’s just not that simple, particularly when you have unreported income.

While I think that you are over thinking this, I will defer to others (after we get your age at the time) on whether or not you need to report and explain this on your SF-86. I guess we should also know what clearance you are going after.

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#3

I currently babysit on the side- that is the job that pays me through Venmo. I am 31 years old. At the time I had a regular job that also didn’t issue a W2 for the 2 years I was there, I was 24, that was the first time I did my taxes alone. I omitted this job that gave me no W2 for the 2 years being there. I usually had my taxes done professionally, but at that time, starting at 24, I did my taxes by myself without guidance, to save money. Maybe I should have sought guidance and not put anything on the back burner. I didn’t even think about it afterward. Twenties for me weren’t the best times in my life…I know better now in my thirties.

#4

This is for U.S. Customs

#5

From a tax point of view . . . Are you married? Do you claim dependents? Does Venmo pay you as an employee or as a contractor? How about the previous job?

You clearly violated tax laws. When you were younger, I expect that you can claim that you just didn’t know what you were doing and that you were given bad advice. But, you are still receiving money without reporting it? Venmo must be reporting it somehow. Did you receive a W2 or 1099? If you are receiving cash or checks, without withholding, you need to file a Schedule C with your tax return. You are, in fact, a “sole proprietor” business and you are supposed to be keeping records. You will be able to deduct expenses . . . Well . . . Things get complicated.

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#6

Thank you for helping me. I am single with no kids or dependents. Venmo does not pay me as an employee or contractor I don’t think. I was paid as an employee at my 2-year job. I receives no W2 or 1099 from Venmo…I believe because the amount I got was under $1900, it does not require a W2 or 1099 according to their policy. It’s not too late for me to put this on my tax return as I have not filed yet and i only started babysitting in 2017.

But for the job I had 7 years ago, should I file an Amendment before my eqip is due early next week?

I also plan to see a professional to help me woth this tax Amendment if I need to go the Amendment route. I just don’t know how much these taxes will be and if I can even pay it in one lump sum.

Should I still go ahead with the application process?

#7

Don’t worry about the job from seven years ago. You don’t have records and you likely earned too little to owe any taxes.

It sounds like Venmo is acting like Uber and Lyft. If you made enough money they would send you a 1099-K, which is for credit card processing companies. This gives you a way to avoid reporting your income because they don’t report it to the IRS if you earn little enough that they are not required to send you the form.

On the other hand, you are supposed to be keeping records and reporting this on a Schedule C. Will the IRS catch you if you do not? No, they will not. But, you ARE committing tax fraud. It will cost you a little bit extra to file properly but a professional can help. You don’t need an accountant, someplace like Liberty Tax Service can do the job and you can find discount coupons on-line.

#8

The income threshold for being exempt from income taxation is very low – far less than 20K .

#9

Really . . . As a professional tax preparer, I had no idea . . .

The number, over recent years, has been in the area of $10K for federal returns, under most circumstances.

#10

Venmo is a peer to peer social networking type of payment service. It’s not much different than Paypal (in fact, it’s owned by Paypal). Like Paypal, it’s not an employer, so even if you get paid $2000 by someone through Venmo(or Paypal) it’s not reported. That money could be someone paying you back for something, buying something you’re selling, etc. So, no, it won’t be reported to any tax authorities but that doesn’t mean you shouldn’t report it if it is associated to income. By the law, any income received should be reported on your tax return. Even if you did not receive a W2, 1099, etc. from the payer. Babysitting money is income. Receiving money from someone via Paypal or Venmo because they owe you or maybe you went to dinner and paid the whole bill and then they Venmo you their share is not something you need to worry about. It’s no different in that scenario than the friend giving you cash to cover their share. So yes, add up all the baby sitting income and be sure to report it if you want to be fully truthful on the E-QIP. Do most people not report income paid as cash for odd jobs like babysitting? Probably not. But most people aren’t going for a security clearance where they have may be subject to a polygraph and don’t want to be caught in a lie.

Your income 7 years ago for which you received no W2 for, nor did you include that on your tax return, is a dicey one. The SF85 and 86 forms ask about financial related concerns going back 7 years. And while you may have genuinely not been aware that you should report it if the W2 wasn’t provided, the tax law doesn’t care. If you made, for example, $20,000 of unreported income, it still must be reported even if you end up owing nothing and getting a full tax refund. You may even be entitled to a refund if the employer was deducting taxes!

So, you need to address this one and clear it up so you can truthfully report it on the E-QIP and be able to speak to it when you get interviewed during the BI. Start by making an appointment with your local IRS office. They may advise you to file a 1040X (amendment), depending on how many tax years it has been. Do you have any records of what the income was for that job that didn’t report it? Do you have your last paystub of the year for it that would show total gross income? If the IRS had received your W2 from your employer, you would have gotten a bill at some point to pay back taxes plus penalty and interest. Since it appears they didn’t, you may have to dig some.

#11

For such a case may take place in the future, always do use your tax filing online, IRS provides to do so, as well as other services like filing a fillable W-2 tax form. But in that very case, you do need a professional assistance, because the situation seems to be common, so there should be a way out