Yes. That is the short answer, and it catches people off guard every year. A client tells me they made a few thousand on the side, no form ever showed up, so they assumed it did not count.
The form does not make income taxable. The income does. A 1099 reports what you earned to the IRS. Its absence does not turn the money tax-free.
Cash counts. So do Zelle, Venmo, and PayPal.
If someone paid you for work, that payment is income, whether it came as cash, a check, or a transfer through an app. The method does not change the rule.
Money a friend sends you for their half of dinner is not income. Money a customer sends you for a service is. Same app, different reason, different tax result.
The 1099 threshold moved, and that made things worse
For a few years the plan was to send a 1099-K for as little as $600 through payment apps. That plan is gone. The 2025 law put the threshold back to $20,000 and more than 200 transactions for 2026.
So most side income through an app will not generate a form at all. People read that as “under twenty thousand, I do not report it.” That reading is wrong.
The threshold decides paperwork, not tax
The $20,000 rule decides whether the app sends a form. It does not decide whether you owe tax. You report the income either way.
The IRS finds income without a form
The IRS runs a matching system. Every 1099 filed under your name gets compared to your return. Leave one off and you can expect a notice. That part people understand.
The part they miss: the IRS does not need a 1099 to find income. Bank deposits, your prior returns, and audits of the person who paid you fill the gaps. Reporting income the IRS never got a form for is still the law, and it protects you if questions come later.
Hobby or business
Once you report the income, the next question is how. Selling once in a while with no real profit motive can be a hobby. Running the activity to make money is a business.
| Hobby | Business (Schedule C) | |
|---|---|---|
| Report the income | Yes | Yes |
| Deduct expenses | No | Yes |
| Self-employment tax | No | Yes, over $400 of profit |
Which one costs less depends on your numbers, but a real business lets you deduct expenses a hobby cannot.
The clean way to handle it
- Track the income as it comes in.
- Keep a separate account for the work.
- Save records of what you were paid and what you spent.
When a form does not arrive, your own records are what you file from. If you have side income and you are not sure what to report or how, that is a common conversation in my office, and a quick one to sort out before it becomes an IRS letter. Book a consultation.