My tax return has always been incredibly easy. One company, one W-2. However I also have my cosmetology license. I haven’t done hair in years but at the end of 2025 I decided to take 6 clients (chair rental) for some extra cash. That net income was less than $400. I never received anything, like a 1099 in the mail. I’ve gotten a lot of mixed feedback on this. From everything I find, I don’t need to pay self employment tax on that amount, and I don’t need to report it. I will still be filing my W-2 for my main job. Is it true I’m not required to report the salon earnings? Why is it suddenly required for me to report the salon earnings just because I’m filing a W-2 for something separate? I don’t understand.
The reason I’m asking is because it’s going to cost substantially more to get my taxes done this year if my tax person has to include my self employment income. Roughly $250 more. That’s literally what I made at the salon in 2025. Please help, anyone with advice.
Self employment net income is less than $400. Do I have to report it?
byu/Temporary-Industry-2 intax
Posted by Temporary-Industry-2
11 Comments
Sounds like your taxes are pretty simple overall. You could save a lot by just doing it yourself with FreeTaxUSA or Cash App Taxes. Technically I think you’re supposed to report this, but if there’s no 1099, the IRS probably doesn’t know about it.
If you file an income tax return, you are required to include all your income. Just because the SE income is less than the threshold for SE taxes to apply, it doesn’t make it not subject to income taxes. You earned that money working as a SE cosmetologist
You won’t pay self employment tax on it if under $400, but if you file a return, you have to include ALL of your income. If it’s that simple, do your return yourself on FreeTaxUSA (or one of the IRS free file sites if you are eligible based on income). Or go to an AARP or VITA (if income eligible) site if you want assistance.
How much are your gross receipts for the salon?
What are your expenses?
How much did you pay for the license and chair rental?
The difference between the two will be your net profit.
If your net profit is less than $400 you will not need to pay self-employment taxes but you do need to file the Schedule C.
As an independent contractor l, you should keep records of your income and expenses.
Unfortunately, yes you would need to pay more with tax prep fees since there are more forms needed.
$250 sounds a little high though.
That said if you just have this income and your w-2, you can file online for free if you donor yourself.
Just remember to file by April 15
Short answer : **You are supposed to report all of your income, yes.**
I think it’d be against Rule 05 of this sub to suggest or recommend you don’t.
Realistically, are you going to get caught if you don’t report it? *IMO probably not,* but that’s not the point, really.
But if your situation is really that simple, would recommend just using FreeTaxUSA, which wouldn’t charge you extra to include that information (and the tax on a profit of $250 is, like … pretty negligible).
Anyone who is able to work and do self employment activity as basic as you describe probably does not need a “tax person” or to pay $250 for a Schedule C you can easily do yourself.
You still report it. The $400 threshold is for self-employment tax, not whether the income gets reported. If net earnings are under $400, they typically won’t owe SE tax, but the income is still included on the return.
The confusion comes from mixing filing requirements with tax calculation. You report all income, then the system determines whether SE tax applies. Under $400 just means no SE tax, not that it disappears.
In cases like this, it often only changes the return slightly, especially if there are small related expenses.
The 1040 is known to handle federal income tax, but it also helps capture (or refund) other taxes like Social Security, Medicare, and Self Employment tax.
<$400 means you don’t have to pay Self Employment tax. But if your income is >$15,750 (for 2025, Single) then you’re going to have federal income tax due (generally) and that adds up your W-2 and self-employment income.
>Why is it suddenly required for me to report the salon earnings just because I’m filing a W-2 for something separate? I don’t understand.
Other people aren’t addressing this – so I will.
If you didn’t have the W-2 then you would have $0 of tax liability for the year. The low net-profit excludes you from SE tax and your total income would be lower than the standard deduction. If you have $0 of tax liability you generally do not have an obligation to file at all, including the Sch C.
However, you do have a W-2 that is presumably more than the standard deduction. (Or you’re seeking some other credit that requires filing) That means you have an obligation to file. And when you file, you need to include everything.
Hope that helps.
As always, one needs to assess risk reward. The risk of not reporting this income which you do not owe taxes on is essentially zero. If you are going to listen to these responses and do every single thing you are supposed to do, it will cost you 250. Up to you to
Use freetaxusa and do your own tax return.