Can a company not send you 1099-NEC but still report your income to the IRS?
So I did some freelance graphic design work earlier this year for a local business and only earned about $450 total from them. Now I'm trying to figure out what to expect for tax season. I know that companies aren't required to send a 1099-NEC form if you earn below $600, but I'm wondering if they might still report that income to the IRS even if they don't send me anything? One of my friends who works in accounting told me that many larger companies just automatically report all payments to contractors to the IRS electronically regardless of the amount, but they only mail physical 1099-NECs to people who earned $600+. That seems weird to me - wouldn't they have to either report to both of us or neither? Just trying to understand if I need to report this income on my taxes even if I never receive a 1099-NEC. Don't want to get in trouble with the IRS over a small amount!
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Rudy Cenizo
Yes, it's actually quite common for companies to report payments to the IRS without sending you a 1099-NEC when you're under the $600 threshold. The $600 threshold is only for the requirement to send YOU the form - it doesn't limit what they report to the IRS. Many businesses, especially larger ones, have automated systems that report all payments to contractors electronically to the IRS regardless of amount. Remember that you're still legally required to report ALL income on your tax return, even if you never receive a 1099-NEC. The IRS considers any income you earn as taxable, regardless of whether it's documented on an official form or not. So yes, your friend is correct - companies can and often do report sub-$600 payments to the IRS while not sending you a physical form. It's always better to report the income even without the form rather than risk the IRS flagging a discrepancy later.
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Natalie Khan
•Wait so if I did a bunch of small gigs last year all under $600 and didn't get any 1099s, I still have to report that? How am I supposed to remember all those amounts exactly without documentation??
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Rudy Cenizo
•Yes, you're still required to report all income regardless of the amount or whether you received documentation. The best practice is to keep your own records of all your earnings throughout the year. For small gigs, you should track payments as they come in using a spreadsheet, accounting software, or even a dedicated notebook. Save invoices, payment confirmations, bank deposits, or any records that show what you earned. This makes tax time much easier and ensures you're reporting accurate amounts.
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Daryl Bright
I had a similar situation with some side design work and found taxr.ai super helpful. I was confused about what to report since I didn't get any 1099s for my smaller jobs, but I had emails and payment receipts scattered everywhere. I uploaded screenshots of my payment history and emails to https://taxr.ai and it organized everything into a clean report showing what I needed to include on my Schedule C. Saved me from guessing or missing anything the IRS might know about!
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Sienna Gomez
•This sounds interesting but I'm curious - did it actually help with figuring out if the companies reported to the IRS? Or does it just organize what you know you got paid?
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Kirsuktow DarkBlade
•Is it secure? I'm always nervous about uploading financial docs to random websites. No offense but how do you know they're not stealing your info?
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Daryl Bright
•It doesn't tell you definitively what was reported to the IRS, but it extracts and organizes all your payment information from various sources so you can report everything accurately regardless of what the companies might have submitted. The site uses bank-level encryption for all uploads and doesn't store your documents after processing. They explained their security protocols clearly on their site, which made me comfortable using it. They also have SOC 2 compliance which is what financial companies use.
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Sienna Gomez
Just wanted to update after trying taxr.ai - it was actually really helpful! I uploaded a bunch of PayPal receipts and emails from clients and it created this detailed breakdown of all my freelance income, even the small amounts under $600. I was missing almost $2300 in income that I'd forgotten about from small projects. Now I feel confident I'm reporting everything correctly even without official 1099 forms. Definitely less stressful than guessing and worrying about the IRS finding discrepancies!
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Abigail bergen
If you're having trouble confirming whether those payments were reported to the IRS, you might want to try getting your wage and income transcript directly from the IRS. But good luck getting through on their phone lines! I spent HOURS trying before discovering https://claimyr.com - they hold your place in line with the IRS and call you when an agent is about to answer. There's a video showing how it works here: https://youtu.be/_kiP6q8DX5c I used it to get my transcript which showed exactly what had been reported under my SSN, including some small payments I had no idea companies had reported. Made a huge difference for my peace of mind about what the IRS already knows.
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Ahooker-Equator
•How does this actually work though? The IRS just lets some third party hold your place in line? That seems sketchy.
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Anderson Prospero
•Yeah right, this sounds like a scam. The IRS doesn't partner with random companies for phone calls. I'm calling BS on this one.
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Abigail bergen
•It uses an automated system that waits on hold for you using their phone lines. When an IRS agent picks up, their system immediately connects them to your phone number. It's not an official IRS partnership - just a clever solution to their ridiculous wait times. I was skeptical too until I tried it. It's basically like having someone else sit on hold instead of you. They don't access any of your tax info or speak to the IRS on your behalf - they just bridge the call when an agent answers so you can talk directly to the IRS yourself.
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Anderson Prospero
I need to eat my words about Claimyr. After my skeptical comment, I decided to try it anyway because I was desperate to get my transcript and see what had been reported. It actually worked exactly as described! Got a call back in about 40 minutes when I had been on hold myself for over 2 hours the day before. The IRS agent confirmed that yes, several companies had reported payments to me under $600 that I never received 1099s for. One company even reported a $75 payment! So the original question is definitely answered - companies absolutely can and do report sub-$600 payments to the IRS without sending you a 1099-NEC. Report everything, folks!
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Tyrone Hill
Just my 2 cents as someone who's done freelancing for years - ALWAYS report all income regardless of 1099s. I've been audited before over a tiny discrepancy where a company reported $450 to the IRS but I didn't include it because I never got a form. The penalty and interest ended up being way more than the tax would have been. Better safe than sorry! Keep your own records of EVERYTHING.
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Toot-n-Mighty
•What kind of penalty did you get? Was it just the tax you should have paid plus interest or was there an additional penalty?
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Tyrone Hill
•It was the original tax I would have owed (which honestly wasn't much at all on $450), plus interest accruing from the original due date, plus a 20% accuracy-related penalty on top of the tax. The worst part wasn't even the money - it was the stress of dealing with the IRS and all the extra scrutiny they put on my returns for the next couple years. Definitely not worth trying to save a few bucks on taxes.
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Lena Kowalski
Slightly related but different question - do companies use the same $600 threshold for reporting to state tax agencies? I've got income from three different states and I'm confused about what might show up where...
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DeShawn Washington
•It varies by state! Some states follow the federal $600 threshold but others have different requirements. California for example requires reporting for payments of $600 or more, just like federal, but New York has a $600 threshold for service payments but $10 for royalty payments.
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Sarah Ali
This is such a common confusion point! Yes, you absolutely need to report that $450 even without a 1099-NEC. The threshold only applies to the company's obligation to send YOU the form, not their reporting to the IRS. I learned this the hard way when I started freelancing. I kept meticulous records using a simple spreadsheet - date, client, amount, and description. Even saved screenshots of payment notifications from PayPal/Venmo/etc. The key thing to remember is that the IRS can match payments reported by companies to what you declare, regardless of the dollar amount. So even if you think a $450 payment is "too small to matter," it could still trigger a notice if there's a mismatch. My advice: create a simple tracking system now for any future freelance work, and definitely include this $450 on your Schedule C. The peace of mind is worth way more than any small tax you'll owe on it!
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