Self-Employment Tax Checklist

Form 1099-NEC can report qualifying nonemployee compensation; Section 6041A's threshold is $2,000 for TY2026, subject to payee, payment-method, and other rules. Form 1099-K covers payment-card transactions without a minimum and third-party-network transactions that generally exceed both $20,000 and 200 transactions federally. NJ-WT's $1,000 rule concerns a payer's New Jersey state-copy filing duty and does not redefine the federal issuer/payee-statement threshold. Taxability does not depend on receiving a form, and the same receipt must not be counted twice.

Only if you chose the standard mileage rate in the first year the car was available for business use; if you used actual expenses that first year, or later claimed MACRS depreciation, bonus depreciation, or Section 179 on the car, the standard mileage rate is not available for that car, and a leased car that used the rate must keep it for the whole lease.

The Section 199A QBI deduction can allow eligible self-employed taxpayers to deduct up to 20% of QBI after allocable deductions, subject to the taxable-income ceiling and other limits. For 2026 and later, IRC Section 199A(i) (added by OBBBA Section 70105) also sets a minimum $400 deduction for a taxpayer with at least $1,000 of aggregate QBI from active trades or businesses in which the taxpayer materially participates, with both amounts inflation-adjusted after 2026. NJ does not allow this deduction - your NJ taxable income may therefore be higher than your federal taxable income.

IRC Section 183(d) creates a rebuttable presumption only that an activity is engaged in for profit when gross income exceeds the deductions attributable to it in at least 3 of 5 consecutive tax years. It is not a safe harbor: failing the test creates no contrary hobby presumption, and meeting it does not by itself establish a Section 162 trade or business or Schedule C treatment. Profit motive otherwise turns on the nine non-exclusive factors in Treas. Reg. Section 1.183-2(b); no factor or numerical majority controls. If the activity is not engaged in for profit, income remains reportable while current law generally disallows its operating-expense deductions.