So you picked up some freelance work — maybe designing logos, doing some writing, editing videos, whatever. Someone paid you. Cool. But if they paid you $600 or more in a year, they’re generally required to send you a 1099-NEC form reporting what they paid you. And they send a copy to the IRS as well.
That last part matters a lot. It means the IRS already knows about that income before you even sit down to file your taxes. If you don’t report it, their records and yours won’t match — and that’s exactly the kind of thing that triggers a closer look at your return.
Here’s the other big thing nobody warns you about: there’s no withholding on freelance income. When you work a regular job, your employer quietly skims some of your paycheck and sends it to the IRS for you. Taxes just… happen in the background. Freelance doesn’t work that way. Every dollar you earn lands in your pocket untouched — which feels great right up until tax season, when you owe everything at once.
If your net earnings from self-employment are $400 or more in a year, you’re required to file a Schedule SE and pay self-employment tax on top of regular income tax. Net earnings means what’s left after you subtract business expenses — so if you earned $500 but spent $200 on supplies, your net is $300 and Schedule SE may not apply. That said, you may still need to file a regular return depending on your total income. It’s not a penalty — it’s just how it works when you’re your own boss. But it catches a lot of first-timers off guard.
And just because you didn’t get a 1099 doesn’t mean you’re off the hook. The IRS is clear: no matter what forms you receive or don’t receive, if you got paid for goods or services, that income needs to go on your tax return. The form just makes it easier to track. The obligation to report it is yours either way.
If this is your first year freelancing and the tax stuff feels overwhelming, a free resource like VITA (Volunteer Income Tax Assistance) can help you file without paying for a professional. But don’t just skip it and hope nobody notices — they have the receipts.