Key takeaways
- For payments made in 2026, the 1099-NEC and most 1099-MISC thresholds rose to $2,000, up from $600. The amount may be adjusted for inflation starting in 2027.
- Payment apps and marketplaces send a 1099-K only when payments exceed $20,000 and the number of transactions exceeds 200.
- All business income is taxable whether or not you receive a 1099.
- A 1099 shows gross income only. Your receipts are what turn it into a smaller taxable profit.
What is Form 1099?
A W-2 reports what an employer paid an employee. A 1099 reports almost everything else: freelance fees, rent, prizes, interest, payment-app income and more. The payer fills it out and sends Copy B to you and Copy A to the IRS, so the IRS already knows what you were paid before you file.
For contractors, that’s the key point. The 1099 shows only gross pay. It knows nothing about the laptop, software, mileage and coworking fees you paid to earn it. Those are yours to prove and deduct.
Keep your business receipts organized for 1099 season with the Manage Receipt app.
Types of 1099: NEC, MISC and K
| Form | What it reports | Threshold for 2026 payments |
|---|---|---|
| 1099-NEC | Pay for services from a business that isn’t your employer (freelance, contract and consulting fees) | $2,000 or more |
| 1099-MISC | Rents, prizes and awards, other income, medical payments; royalties; gross proceeds to attorneys | $2,000 for most boxes; $10 for royalties; $600 for attorney gross proceeds |
| 1099-K | Payments through third-party networks such as payment apps and online marketplaces, plus card processors | Over $20,000 and over 200 transactions for third-party networks |
Other common versions include 1099-INT (interest), 1099-DIV (dividends) and 1099-B (broker sales), but those rarely concern business expenses.
Who gets a 1099
You’ll usually receive a 1099-NEC if a business paid you $2,000 or more during 2026 for services and you’re not on its payroll. Payments to corporations are generally exempt, apart from some exceptions such as attorney fees. Payments made by credit card or through a payment app are not reported on a 1099-NEC; they’re reported by the card processor or platform on a 1099-K instead.
Not getting a form doesn’t mean the income is tax-free. If a client paid you $1,500, you won’t get a 1099-NEC under the new threshold, but you still report the $1,500 as gross receipts. The same goes in reverse: if you hire contractors, you may need to issue 1099s yourself, and Schedule C asks whether you did.
Tracking expenses against 1099 income
As a contractor you pay tax on profit, not on the totals printed on your 1099s. Here’s how the numbers flow:
- Add up incomeTotal all 1099s plus any payments that didn’t come with a form.
- Subtract expensesDeduct ordinary and necessary business expenses backed by receipts.
- Report on Schedule CIncome goes on line 1, expenses on the lines for each category.
- Pay tax on the profitIncome tax plus self-employment tax apply to the net amount.
A 1099-K reports gross payments, including refunds, fees and sometimes personal reimbursements from friends. Keep records showing which payments were business income and which weren’t, so you don’t pay tax on money that was never profit.
Because no tax is withheld from 1099 income, most contractors also need to make quarterly estimated tax payments. Freelancers juggling several clients can find a practical setup on our receipt tracking guide for freelancers.
1099 deadlines
| Form | Copy to recipient | Copy to IRS |
|---|---|---|
| 1099-NEC | January 31 | January 31 (paper or electronic) |
| 1099-MISC | January 31 (some boxes February 15) | February 28 on paper, March 31 electronically |
| 1099-K | January 31 | February 28 on paper, March 31 electronically |
When a deadline falls on a weekend, it moves to the next business day. For forms covering 2026, January 31, 2027 is a Sunday, so copies are due February 1, 2027. If a form is missing or wrong by mid-February, ask the payer for a corrected copy, but don’t wait for it to file: report the income you can document.
Set your receipts against your 1099s
Store your 1099s in Manage Receipt’s Doc Wallet and scan the receipts for every business purchase during the year. At tax time, the AI tax report groups your deductible expenses by category, so you can subtract them from the income on your forms instead of paying tax on the gross amount.
Explore AI Tax ReportsFrequently asked questions
Do I need receipts as a 1099 contractor?
Yes. The IRS expects you to prove every business expense you deduct, and receipts are the main evidence. Under IRS travel rules you need receipts for all lodging and for other travel, gift and vehicle costs of $75 or more. Keeping every receipt is the safest habit.
What is the 1099-NEC threshold?
For payments made in 2026 and later, a business must issue Form 1099-NEC when it pays a non-employee $2,000 or more for services in a year. The threshold was $600 for 2025 payments and may be adjusted for inflation beginning in 2027. Income below the threshold is still taxable.
Do I have to report income if I didn’t get a 1099?
Yes. All business income is taxable whether or not a client or platform sends you a form. Report it as gross receipts on Schedule C with your other income. Keeping your own record of invoices and deposits makes this easy and protects you if forms are missing.
What is the difference between a 1099 and a W-2?
A W-2 reports wages paid to an employee, with income and payroll taxes already withheld. A 1099 reports payments to non-employees and other income with usually nothing withheld. Contractors who get 1099s pay their own self-employment tax and can deduct business expenses.
What should I do if my 1099 is wrong?
Contact the payer and ask for a corrected form, showing your invoices or payment records. If you can’t get one before filing, report the correct amount you can document and keep your records. If a 1099-K includes personal or refunded payments, record why they aren’t business income.