Reporting income whether or not you get a 1099
Those who pay you directly (such as clients or vendors) must issue a 1099-NEC, while payment platforms issue a 1099-K once the amount crosses the payment thresholds for the appropriate form. You’re required to report every dollar you earned, even income that falls below those thresholds or is paid out to you in cash.
| Income source | Typical form | Where it goes |
|---|---|---|
| Freelance clients | 1099-NEC (if income exceeded $2,000 for the 2026 tax year, or $600 for the 2025 tax year)* | Schedule C |
| Payment apps or platforms | 1099-K (if payments exceeded $20,000 and you had more than 200 transactions in the tax year)* | Schedule C |
| Cash or no form issued | None | Schedule C, using your own records |
*There may be other factors that can lower the reporting requirement thresholds, and you may receive these forms even below the reporting threshold.
Add up income from all your side hustle sources and report it, along with your deductible expenses, on Schedule C. The net profit figure from Schedule C is what determines your actual tax liability.
Paying self-employment tax
If your net earnings from self-employment total $400 or more, you’ll also file Schedule SE to calculate the 15.3% self-employment tax that covers Social Security and Medicare. Although, there is an opportunity to deduct up to 50%-57% of that SE tax amount on your Schedule C.
The new 1099-NEC threshold
Starting with the 2026 tax year, businesses only have to issue a 1099-NEC once they’ve paid you $2,000 or more, up from the longstanding $600 threshold. The income itself remains fully taxable no matter how much or how little you were paid.
When you need to pay quarterly
If you expect to owe $1,000 or more in tax for the year from your side hustle, you’ll generally need to make estimated quarterly payments rather than waiting until you file to avoid an underpayment penalty.
