You have to report all of your income, whether you're self-employed, or otherwise. Once you netted $400, your subject to self-employment tax. Self-employment tax is 15.3% of your net income. Failure to report all of your income is tax fraud, which is criminal. Craig W Smalley EAAdmitted to Practice before the Internal Revenue Service
If your self employment income is your only income (and your spouse's if married), then you may be able to earn up to $400 (before subtracting expenses) without being required to file a tax return. If you or your spouse do have other income, that self employment income must be included from dollar one.
Once your net self employment income reaches $400, you are then subject to self employment tax (both parts of Social Security and Medicare tax, yours and your employer's- you). Even if your deductions and exemptions are enough to zero out your taxable income, you may still owe self employment tax.
Underreporting income is a serious offense. The penalties range from 25% - 75% of the amount underreported, and in some cases, prison time. It's best not to take the chance.
WalletHub Answers is a free service that helps consumers access financial information. Information on WalletHub Answers is provided “as is” and should not be considered financial, legal or investment advice. WalletHub is not a financial advisor, law firm, “lawyer referral service,” or a substitute for a financial advisor, attorney, or law firm. You may want to hire a professional before making any decision. WalletHub does not endorse any particular contributors and cannot guarantee the quality or reliability of any information posted. The helpfulness of a financial advisor's answer is not indicative of future advisor performance.
WalletHub members have a wealth of knowledge to share, and we encourage everyone to do so while respecting our content guidelines. Please keep in mind that editorial and user-generated content on this page is not reviewed or otherwise endorsed by any financial institution. In addition, it is not a financial institution’s responsibility to ensure all posts and questions are answered.
Ad Disclosure: Certain offers that appear on this site originate from paying advertisers, and this will be noted on an offer’s details page using the designation "Sponsored", where applicable. Advertising may impact how and where products appear on this site (including, for example, the order in which they appear). At WalletHub we try to present a wide array of offers, but our offers do not represent all financial services companies or products.