Gross receipts over filing limit but net profit/loss under $400 - required to file?

[cmc4ew]

I realize the below may be pretty straightforward but I'm doubting myself at this point and want to be sure I've got it straight. Appreciate your patience!

I received a PayPal 1099-K for some side work last year. Gross receipts were over the filing requirement but net earnings (profit/loss line on Schedule C) were under $400 (pretty much broke even).

I do not meet the additional filing requirements listed in the Form 1040 and 1040-SR instructions. Do I have to file? Not asking to get around anything, asking based on IRS site saying "You have to file an income tax return if your net earnings from self-employment were $400 or more. If your net earnings from self-employment were less than $400, you still have to file an income tax return if you meet any other filing requirement listed in the Form 1040 and 1040-SR instructions." I realize this reads pretty straightforward, in which case no (?) I would not have to file even though the 1099 is over the limit...but my brain is mush right now so thank you for helping me check my back!

[AnnetteB6]

Based on the guidance of the IRS and your net self-employment income (gross income minus expenses) being below the $400 limit where any self-employment tax would be owed, you do not have to file a return.

Be sure that you do have documentation showing both your income and expenses related to the side work that you did.  The IRS could question why a return was not filed since the income by itself is above the $400.  

[edited 2/28/2025 | 8:06 am PST]

@cmc4ew 

[cmc4ew]

Thanks Annette - can I clarify something?  You mentioned gross income being below the $400 - gross receipts are over but net profit/loss is under.  Which is gross income - gross receipts or net profit/loss? Want to make sure I have the terminology correct, as I think this is likely what is confusing me (different terms being used for various things).  Thanks!

[AnnetteB6]

My apologies, I'm the one confusing the terminology this morning.  It is your net earnings from self-employment (gross income minus expenses) that needs to be below $400 in order to not be required to file a return.  

I will correct the original answer.

@cmc4ew