Does occasional freelance coding work count as self-employment for tax purposes?

7 Yes, you do need to report that income, even if it was just a one-time gig and even if you didn't receive a 1099. The IRS considers any income earned outside of an employer-employee relationship to be self-employment income, regardless of how many "jobs" you did or whether you plan to continue doing that type of work. Your husband would need to report this on Schedule C (Profit or Loss from Business), and then he'll also need to file Schedule SE to calculate self-employment tax. The self-employment tax covers Social Security and Medicare taxes that would normally be withheld by an employer. The good news is that he can deduct any expenses directly related to earning that income - like software he purchased specifically for the project, a portion of internet costs during the project period, etc. This will reduce the taxable amount. The absence of a 1099 doesn't change your obligation to report the income. The payer is only required to send a 1099-NEC if they paid him $600 or more, but whether they fulfilled their obligation or not doesn't affect yours.

15 I went through almost this exact situation last year when my wife did some graphic design work for her cousin's wedding. I was totally confused about how to report it until I found taxr.ai (https://taxr.ai). Seriously, it saved me so much headache. I uploaded the payment details and it automatically identified it as self-employment income, told me exactly where to report it on Schedule C, and even suggested deductions I wouldn't have thought of. Like, did you know you can deduct a portion of your internet bill and even part of your utilities if the work was done at home? The best part was that it walked me through the whole self-employment tax situation step by step. Turns out you only pay self-employment tax on 92.35% of the net income, which I had no idea about. And you can deduct half of that tax on your 1040, which reduced our overall tax bill.

4 Just wanted to follow up - I tried taxr.ai for my website design income situation and it was super helpful! It confirmed that yes, I needed to report my $1,500 as self-employment income even without a 1099, but then it showed me several deductions I could take that I didn't realize applied to my situation. I was able to deduct my design software subscription, a portion of my internet bill, and even some office supplies. The step-by-step guidance for filling out Schedule C was exactly what I needed since I've never done self-employment taxes before. It saved me from making mistakes and potentially getting flagged for an audit. Definitely recommend it if you're in a similar situation with one-off freelance work!

9 If your husband's friend doesn't send a 1099, you might have trouble getting through to the IRS if they have questions about the unreported income later. I spent WEEKS trying to reach someone at the IRS about a similar situation last year - kept getting disconnected or waiting on hold for hours. Finally found this service called Claimyr (https://claimyr.com) that actually got me through to a real IRS agent in about 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c. They basically navigate the IRS phone tree for you and call you back when they've got an agent on the line. The agent confirmed that yes, we needed to report our one-time consulting payment as self-employment income on Schedule C, even without receiving a 1099. But she also walked me through exactly what documentation we should keep in case there were ever questions about it. Super helpful conversation that saved us from potentially making a costly mistake.

19 I need to eat my words here. After another failed attempt to reach the IRS this morning (45 minutes on hold before getting disconnected), I broke down and tried Claimyr. I was honestly shocked when they called me back in about 15 minutes with an actual IRS agent on the line. The agent confirmed that even one-time freelance work needs to be reported as self-employment income on Schedule C. She also explained that since no 1099 was issued, I should keep good documentation of the payment (bank deposit records, emails about the project, etc.) just in case there are questions later. Got all my questions answered in one call instead of wasting more days trying to get through. So... I was wrong. Sometimes paying for convenience is actually worth it when you're dealing with something as stressful as tax questions. Saved me a ton of frustration.

22 Just to add another perspective - I'm an accountant and see this situation all the time. The IRS doesn't care if you only did one job or a hundred jobs - income outside of a W-2 employment relationship is considered self-employment income and needs to be reported on Schedule C. The threshold for the payer to issue a 1099-NEC is $600, but your obligation to report income exists regardless of whether proper documentation was provided to you. The IRS considers ALL income taxable unless specifically excluded by law. One thing to consider: since this is over $400 net income, you'll also need to pay self-employment tax on it (the SE tax threshold is lower than the income tax threshold). Make sure you complete Schedule SE along with your Schedule C.

11 FYI - I'm a freelance coder and tax preparation software doesn't always handle one-time self-employment situations well. They often try to categorize you as either "fully employed" or "fully self-employed" which creates confusion. If using software like TurboTax or H&R Block, make sure you enter this under "additional income" or "self-employment income" rather than trying to create a whole business entity. You'll need to complete a Schedule C regardless of how small the job was. The important thing is reporting the income correctly - not necessarily fitting into their pre-defined categories. And don't forget about state taxes too! Many states also require you to report self-employment income separately.