I made a small amount on money on Fiverr earlier this year. Less than $300, more than $150. My fiverr gig involved croudsourcing (shorttask), paying people a small amount of money to do simple tasks such as commenting on a video. It isn't just earnings, it's earnings-expenses.
That money is in my paypal. If I fail to make over $600 this year, do I need to pay taxes? I want to withdraw some of it to my bank. Do they report withdrawn money to the IRS? Because at this point I have not made a lot of money - I made about as much as someone would make selling old stuff from his garage on ebay (and I DID sell an old DS). And if my earnings remain small - just $200 - I probably won't bother reporting. So would it be safe to withdraw to bank or do I leave the funds in my paypal.
Now, I plan on doing something else. I want to sell a product of service in the freelancer marketplace (freemarket.com). To promote the product or service I want to hire a marketer through freelancer.com. Projected profits: $300. That might bring me OVER the $600 mark for the year.
Do I need an Employer Identification Number (please tell me I don't - if yes I'm screwed)? I won't go to one of those expensive tax prep specialists (doing so would defeat the whole purpose leaving me with 0). I will use TurboTax. I won't be deducting Internet, housing, phone, etc. because I still live with my parents. And If I do report this income, how would I go about doing it? I have no company name, no EIN, no nothing. I want to at least deduct the expenses resulting in hiring a freelancer and using shorttask. Do I need to jump through hoops or go through red tape? Because I want to hire a freelancer this week.
Please answer the questions. Would withdrawing something to my bank raise a red flag or is it safe? Do I need to report income quarterly or April 15 when everyone else does? How do I deduct my small expenses from this? And should I drop this whole thing, take the small amount I have earned and walk away?