The IRS states that anyone making $400 or more in net income from a side hustle must file an annual tax return and pay income taxes. Further, it's highly recommended that income earned from side gigs be reported and paid on a quarterly basis to avoid large tax burdens and late-payment penalties at the end of the year.

In the United States for the 2025/2026 tax year, the threshold for reporting self-employment income is very low: if you earn $400 or more in net profit from a side job or "gig" work, you are legally required to file a tax return and pay self-employment taxes (Social Security and Medicare). This applies even if your total income is below the standard deduction. If you are an employee (W-2) with a small side hustle, you must report that income even if you don't receive a Form 1099-K. For those whose total annual income from all sources is less than the standard deduction—which is approximately $15,750 for single filers in 2026—you might not owe federal income tax, but you would still owe the 15.3% self-employment tax on those side-hustle profits. Many people mistakenly believe there is a "free" $600 or $1,200 limit, but that is simply the threshold at which companies are required to report the payment to the IRS; your personal obligation to pay taxes on that income starts as soon as your net side-job earnings hit that $400 mark.