Mowing lawns is a common way for young people to make money, and the Internal Revenue Service considers it taxable income. Unless you work for a lawn care business and get a paycheck, you are operating your own business. You must report your income using IRS Schedule C, “Profit and Loss from Business (Sole Proprietorship).” You’ll probably have to complete Schedule SE, “Self-Employment Tax” as well.
Reporting Self-Employment Income
Schedule C has five sections and is used to calculate profit or loss from self-employment. In the first part, you list gross income or revenue. In the second section you claim business expenses. Expenses for mowing lawns might include gasoline and lawnmower maintenance. You may have other business expenses as well like the cost of printing advertising flyers. Parts 3 to 5 are used to report inventory and other business deductions, if any. Subtract expenses from gross income. What’s left is your net profit, and that's the amount that goes on your tax return.
Self-employment tax is IRS-speak for Social Security and Medicare taxes. When you work for someone else, the employer pays part of these taxes. When you work for yourself, you must pay your share and the employer’s share. Use Schedule SE to calculate how much you owe for Social Security and Medicare taxes anytime your net profit from all self-employment exceeds $400 in a year.
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