You are taxed on all income received, even if it is not reported to the IRS. Have you tried searching irs.gov to get answers to your questions? Let's assume you are talking about income in the United States, and this is for independent contractor work. You will need to receive Form 1099 from the company paying you (salary jobs receive Form W-2 from their company). http://www.irs.gov/efile/article/0,,id=98114,00.html See this table explanation from the IRS website for the different types of 1099. Good luck.