Paid in cash: how to report your income without a 1099

Do I have to report money I'm paid in cash?

Yes. Many people believe that with no 1099 there is no tax on that money, but the IRS rule says otherwise: you must report your income even if it is not on any form (1099-NEC, 1099-K, 1099-MISC or W-2) and even if you were paid in cash, goods, property or virtual currency.

A 1099 is only a notice the payer sends the IRS. A client who never sends one does not change your duty to report. The same goes for money sent to you through payment apps: it is income just like bills in your hand.

Reporting also works in your favor: you can subtract your work expenses, and your return serves as proof of income when you need it.

Am I an employee or self-employed?

Before you report, it helps to know which one you are, because it changes where the money goes. For the IRS, what matters is who controls the work: if the person paying you has the right to decide what you do and how you do it, you may be their employee, even if they pay you in cash.

Generally, you are self-employed if you decide how to do the work, set your prices, use your own tools or work for several clients. That is common in construction, cleaning, landscaping, painting, child care and repairs.

• If you are self-employed, your income and expenses go on Schedule C, and the Social Security and Medicare tax on Schedule SE.
• If you were really an employee and were paid with nothing withheld, the IRS lets some misclassified workers use Form 8919 to report the Social Security and Medicare tax that was not collected. Vordana Tax includes Form 8919.
• If you work in a family's home (nanny, housekeeping) and the family decides how and when the work is done, you may be that family's household employee; then the family may need to give you a W-2.

How do I add up what I earned without a form?

Without a 1099, the year's total comes from your own records. Good records help you prepare your return and back up what you report if the IRS asks. Gather everything that shows what you were paid:

• A notebook, spreadsheet or app where you log each payment: the date, the client, the job and the amount.
• Your bank statements: mark the deposits that come from your work.
• The history of the payment apps your clients use to pay you.
• Invoices, receipts or messages where you agreed on a price with a client.

Which expenses can I subtract from the cash I earned?

On Schedule C you subtract the ordinary and necessary costs of your work, and you pay tax only on the profit. Keep the receipts, especially when you pay in cash too.

• Supplies, tools and equipment you buy for jobs.
• Using your vehicle to get from one job to another (not the trip from home to a regular workplace).
• The part of your phone you use for the business.
• What you pay helpers. If you pay someone for their work as a business, you may need to send that person a 1099.

How much tax do you pay on cash income?

Cash from a business pays two taxes. One is income tax, like any other income. The other is self-employment tax, which covers Social Security and Medicare: 15.3% on 92.35% of your profit, once your net earnings from self-employment reach $400 for the year. How it is figured, the Social Security limit and the half you subtract as an adjustment are explained in our guide "Self-employment taxes and Form 1099-NEC".

Because nobody withholds tax from cash, the IRS expects self-employed people to make estimated payments each quarter. If you also have a W-2 job, read our guide "W-2 and 1099 in the same year"; if you drive or deliver through apps, the Uber, DoorDash and Instacart guide covers mileage.

How do I report cash income online with Vordana Tax?

On the Schedule C step you add your business and enter what you collected on line 1 (gross receipts), whether or not you got a 1099. If some clients did send you a 1099-NEC or 1099-K, you enter those on their own step and link them to your business: the software adds them to what you typed, so put on line 1 only what those forms do not already show, so nothing is counted twice.

Then you enter your expenses, and the software prepares Schedule C and Schedule SE and includes them in your federal return, which is e-filed to the IRS. Your return gets a free review before you file it.

Questions

Sources

• Gig economy tax center
• Self-employed individuals tax center
• Independent contractor (self-employed) or employee?
• Recordkeeping

This guide is general information about 2025 federal returns. Your situation may differ; the IRS's instructions are the final word.