Your Side Hustle May Not Get a 1099 This Year. You Still Owe the Tax.

If you freelance on the side, you may get fewer tax forms in January. A client now has to send a Form 1099-NEC only after paying you $2,000 in 2026, up from $600. But the IRS still expects you to report every dollar.

Here is what changed, what did not, and the one date to circle.

Which forms will you still get?

Two reporting limits moved. Freelance pay from a client is now reported at $2,000 instead of $600. Payment apps and online marketplaces send a Form 1099-K only when you go over $20,000 and over 200 transactions in a year, after a 2025 law brought back that older limit.

If this happens in 2026	You get or file	Federal threshold
A client pays you for services	Form 1099-NEC	$2,000 (was $600)
You sell through an app or marketplace	Form 1099-K	Over $20,000 and over 200 transactions
Customers pay you by card directly	Form 1099-K	Any amount
You owe self-employment tax	Schedule SE	Net earnings of $400 or more
You may need quarterly payments	Form 1040-ES	You expect to owe $1,000 or more

Is the income still taxable?

Yes. The IRS says you must report income from goods or services whether or not a form shows up. Self-employment tax, which covers Social Security and Medicare, is 15.3%, and it applies once your net earnings reach $400.

Here is what that can look like. Say your side gig nets $5,000 this year. Schedule SE taxes 92.35% of that profit, so self-employment tax comes to about $706, before any income tax.

What should you do before January 15?

• Add it up. Total what you earned this year from every client and app, not just the ones that will send a form.
• Keep receipts. Tax is figured on profit, so business expenses you track now lower the bill later.
• Pay ahead. The last 2026 estimated payment is due Jan. 15, 2027. If you also have a day job, a new Form W-4 asking for extra withholding can cover it instead.
• Tag personal payments. A gift from family or a friend paying you back for dinner is not taxable income. Mark it as personal in your payment app.

---

Sources: IRS, 1099 filing rules · IRS, Understanding your Form 1099-K · IRS, Self-employment tax · IRS, Schedule SE · IRS, Estimated taxes · IRS, Estimated tax due dates. General information, not tax advice.