1099

[DarcyDean66]

What is the maximum amount of $ that can be made in a year as a 1099 employee (secondary/side job) without having to pay taxes/claim/report? 

[zclar]

Hi Darcy Dean66. Thank you for your question.

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 requirements in the IRS Form 1040 and 1040-SR instructions .

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[K M W]

According to the IRS: 

• Generally, an amount included in your income is taxable unless it is specifically exempted by law. Income that is taxable must be reported on your return and is subject to tax.

So, no matter how much or how little you earn from a secondary/side job, it is required to be reported on your tax return.  Even if it's only a few hundred dollars or even less, it technically is income that is required to be reported on your tax return.

A secondary question may be at what point does a company have to send a contractor a form 1099 to report amounts paid to that contractor? Businesses are required to complete a Form 1099NEC and send it to the contractors if they pay them $600 or more. 

So if you do work for a company and they pay you, say $400, they are not required to issue a 1099NEC to you to report the payment, but you still have a responsibility to report the $400 as income on your tax return. 

[Opus 17]

If you file a tax return for any reason, you must report all your income, no matter how small.

If self-employment is your only job, you must file if your net income (profit after expenses) is $400 or more.  However, note that if you receive a 1099-MISC or 1099-NEC and don't include it on a tax return, the IRS will send you a letter asking for more information and assessing taxes.  Even though you might have zero net profit, it may be necessary to file that officially so the IRS has the records of your expenses and doesn't think you owe taxes.  The IRS does not have to give you credit for expenses unless you prove them. 

[BonnieI]

Hi @DarcyDean66 

Thanks for reaching out to TurboTax Live today.  There are no limits or a maximum amount earned as a non-employee being paid on Form 1099NEC.  The sky is the limit, be sure to keep good records or your business deductions.   

The IRS requires you to report income regardless of the amount earned or whether you get a 1099 or not.  The additional money earned (gross income) will be treated as miscellaneous or business income and can be subject to both regular income tax and self-employment tax.  Please see the link provided by @zclar regarding the IRS minimum filing requirements and @K M W confirming that all income is required to be reported, also the additional TurboTax link, 

https://turbotax.intuit.com/tax-tips/irs-tax-return/does-everyone-need-to-file-an-income-tax-return/...

According to the IRS “self-employment tax is a tax consisting of Social Security and Medicare taxes primarily for individuals who work for themselves.”   The self-employment tax rate is 15.3%, with 12.4% for Social Security and 2.9% for Medicare. 

https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-an...

There usually are ordinary and necessary business deductions allowed to offset your gross income to calculate the net business income reported.  Net business income is combined with all other sources of income, such as wages, unemployment, investment income, etc. and included as taxable income on the Individual return.  As @Opus 17  has replied, it is important not overlook these business deductions, which reduces your gross income.  The net income will be treated as trade or business income on Schedule C, Profit or Loss from Business.   

Below are some helpful links for self-employed individuals:

What Is a Schedule C IRS form? - TurboTax Tax Tips & Videos

*** What self-employed expenses can I deduct?

Taking Business Tax Deductions - TurboTax Tax Tips & Videos

Thanks for using TurboTax Live,

Bonnie

Quality Reviewer Tax Expert