Get started free2026 brings significant changes to how side income is reported to the IRS. The new Form 1099-K threshold means more people will receive tax forms for their side hustles. Here's what you need to know.
The New 1099-K Threshold
What Changed
| Year | Reporting Threshold |
|---|---|
| Before 2022 | $20,000 AND 200+ transactions |
| 2024-2025 | Transition period |
| 2026 | $5,000 (any number of transactions) |
What This Means
If you earn $5,000 or more through payment apps like PayPal, Venmo, Cash App, or gig platforms, you'll receive a Form 1099-K - and so will the IRS.
Who's Affected?
Now Receiving 1099-K
- Uber, Lyft, DoorDash drivers
- Etsy, eBay, Poshmark sellers
- Freelancers paid via PayPal
- Anyone using payment apps for business
Important Note
You must report ALL income, even if you don't receive a 1099-K. The threshold only affects reporting requirements, not your tax obligations.
Self-Employment Tax Basics
The $400 Rule
If you earn $400 or more in self-employment income, you must:
- File a tax return
- Pay self-employment tax
Self-Employment Tax Rate
| Tax Component | Rate |
|---|---|
| Social Security | 12.4% |
| Medicare | 2.9% |
| Total | 15.3% |
You pay both the employer and employee portions.
Comparison: Types of Side Income
| Criteria | I am Beezy | Gig Apps | Freelancing | Selling Online |
|---|---|---|---|---|
| 1099-K Likely | ⚠️ If over $5k | ⚠️ If over $5k | ⚠️ If paid via apps | ⚠️ If over $5k |
| Expense Deductions | ⚠️ Limited | ✅ Vehicle, phone | ✅ Home office, equipment | ✅ Cost of goods |
| Quarterly Taxes | ⚠️ Maybe needed | ⚠️ Recommended | ⚠️ Recommended | ⚠️ Recommended |
| Flexibility | ✅ Complete | ⚠️ Demand-based | ✅ High | ⚠️ Order-dependent |
| Physical Effort | ✅ None | ❌ Driving/delivery | ✅ Usually low | ⚠️ Shipping |
| Start-up Cost | ✅ None | ⚠️ Vehicle | ⚠️ Equipment | ⚠️ Inventory |
Deductions for Side Income
Common Deductions
| Deduction | Applies To |
|---|---|
| Home office | Those with dedicated workspace |
| Mileage | Drivers, delivery workers |
| Equipment | Computers, phones, tools |
| Supplies | Materials for your work |
| Software | Apps and subscriptions |
| Health insurance | Self-employed premium deduction |
The Standard Mileage Rate
For 2026, the IRS standard mileage rate for business use is typically around $0.67 per mile (check current rate).
Quarterly Estimated Taxes
When to Pay
| Quarter | Period Covered | Due Date |
|---|---|---|
| Q1 | Jan 1 - Mar 31 | April 15 |
| Q2 | Apr 1 - May 31 | June 15 |
| Q3 | Jun 1 - Aug 31 | September 15 |
| Q4 | Sep 1 - Dec 31 | January 15 |
The Rule
If you expect to owe $1,000 or more in taxes, make quarterly payments to avoid penalties.
Practical Tips
Tip 1: Track Everything
Keep records of all income and expenses from day one.
Tip 2: Set Aside 25-30%
Save a portion of every payment for taxes.
Tip 3: Use Apps
Mileage tracking apps like Stride or MileIQ can save you money.
Tip 4: Keep It Simple
With I am Beezy, you can earn extra income with simpler tax implications.
Start with I am BeezyFrequently Asked Questions
Do I report income even without a 1099?
Yes! All income must be reported regardless of whether you receive a tax form.
What if my side hustle loses money?
You may be able to deduct losses against other income, subject to IRS hobby loss rules.
Can I avoid self-employment tax?
If you earn less than $400 in self-employment income, you don't owe SE tax.
Checklist Side Income Taxes 2026
- [ ] Track all income received
- [ ] Keep records of deductible expenses
- [ ] Calculate quarterly tax estimates
- [ ] Pay quarterly if expecting $1,000+ tax bill
- [ ] Watch for 1099-K forms in January
- [ ] Try flexible earning with I am Beezy
Conclusion
The 2026 IRS changes mean more side hustlers will receive Form 1099-K. Understanding your obligations helps you stay compliant and maximize deductions.
For straightforward extra income, I am Beezy offers a simple way to earn on your terms.
Join I am Beezy
