The $400 rule for self-employment
For most 1099 workers, one rule decides everything: if your net earnings from self-employment are $400 or more, you have to file a federal return. It applies to gig work, freelancing and side jobs, even part-time or temporary ones, and it applies whatever your age and whatever your other income.
The rule exists because self-employment tax is only paid through your return. There is no employer withholding it for you.
“Net earnings” is not the same as what the apps paid you:
- Start with your gross earnings from all apps, clients and cash jobs.
- Subtract your business expenses on Schedule C, such as mileage, phone and supplies. The result is your profit.
- Multiply the profit by 92.35% on Schedule SE. That is your net earnings from self-employment.
So you need about $434 of Schedule C profit to reach $400 of net earnings.
| Schedule C profit | Net earnings (92.35%) | Must file for self-employment? | Self-employment tax |
|---|---|---|---|
| $350 | $323 | No | $0 |
| $1,500 | $1,385 | Yes | $212 |
The 2026 gross income thresholds
If your net earnings from self-employment are under $400, you may still have to file because of your total income. For 2026, the thresholds are the standard deduction plus the extra amount for age 65 or older:
| Filing status | Under 65 | 65 or older |
|---|---|---|
| Single | $16,100 | $18,150 |
| Head of household | $24,150 | $26,200 |
| Married filing jointly | $32,200 | $33,850 (one spouse 65+), $35,500 (both) |
| Married filing separately | $5 | $5 |
Two details trip people up:
- For a service business, gross income means gross receipts, not profit. Everything the apps and clients paid you counts toward these thresholds, before expenses.
- Married filing separately has a threshold of just $5, so almost everyone in that status has to file.
A side gig can make you file even with low income
A student earns $8,000 from a part-time W-2 job and makes $600 of profit delivering food. Their total income is far below the $16,100 threshold, and they owe $0 of income tax. But their net earnings from self-employment are over $400, so they have to file and pay $85 of self-employment tax. The same applies to a dependent, even though a parent claims them.
No 1099 doesn’t mean no filing
Apps and clients only have to send a Form 1099-NEC when they pay you $2,000 or more in 2026, and payment platforms only send a 1099-K above $20,000 and 200 transactions. Below those amounts you may get no form at all, but the income still counts. Our guide on reporting income without a 1099 explains how to add it up.
When filing is worth it even if you don’t have to
The IRS recommends filing if you can get money back, for example if:
- Tax was withheld from a W-2 paycheck.
- You made estimated tax payments during the year.
- You qualify for a refundable credit, such as the Earned Income Tax Credit, the additional child tax credit or the premium tax credit.
Filing also puts your self-employment earnings on your Social Security record, which builds your future benefits.
Other reasons you must file
The IRS lists other situations that require a return whatever your income. The most common for 1099 workers:
- Advance payments of the premium tax credit were made for health coverage from the Marketplace. You got a Form 1095-A.
- You owe special taxes, such as additional tax on an early retirement account withdrawal, or Social Security and Medicare tax on tips you didn’t report to an employer.
- You received distributions from a health savings account (HSA).
State rules are different, so check your state’s filing requirement too. Our guide to state taxes for 1099 workers has links to each state.
What to do next
- Add up your profit: everything you earned minus your business expenses.
- If it is about $434 or more, plan to file and use our self-employment tax calculator to see what you owe.
- If you expect to owe $1,000 or more, you should also be making quarterly estimated payments.