What Is a 1099 Form? A Guide for Gig and Self-Employed Workers

A 1099 is the form that reports money you were paid as a contractor, not an employee. If you drive for a gig app, expect a 1099-NEC once you earn more than $2,000 in 2026, or a 1099-K if you take in more than $20,000 across more than 200 transactions. Either way you owe tax on that income - and tracking your miles is the biggest legal way to shrink the bill.

Sources: IRS, Standard Mileage Rates - 72.5 cents per business mile for 2026. IRS, Self-Employment Tax - 15.3% on 92.35% of net profit. The One Big Beautiful Bill Act (2025) reverted the 1099-K reporting floor to more than $20,000 and more than 200 transactions and raised the 1099-NEC floor to $2,000, effective January 1, 2026.

What a 1099 form actually is

A 1099 is an information return. A business that paid you during the year files it with the IRS and sends you a copy, so the IRS already knows what you were paid. It is the contractor version of the W-2 your employed friends get. There is no single 1099 - it is a family of forms, each covering a different kind of payment. As a gig or self-employed driver you will mostly deal with two of them: the 1099-NEC and the 1099-K.

The two 1099s gig drivers see

1099-NEC (nonemployee compensation)

This reports money a company paid you directly for your work. For 2026, a payer must send a 1099-NEC once they pay you more than $2,000 in the year. That floor used to be $600 - the One Big Beautiful Bill Act raised it starting January 1, 2026. Rideshare and delivery platforms often report your earnings here.

1099-K (payment card and third-party network transactions)

This reports money that flowed through a payment processor or app. For 2026 you get a 1099-K only if you took in more than $20,000 and had more than 200 transactions. Earlier plans to drop that floor to $5,000, then $2,500, then $600 were reversed - the $20,000 and 200-transaction rule is back for 2026. Some rideshare apps report your gross fares this way. See the 1099-K for delivery and rideshare for detail.

1099 vs W-2: why it changes your taxes

The label decides who handles your taxes. A W-2 employee has Social Security, Medicare, and income tax withheld from every check, and the employer pays half of the Social Security and Medicare bill. A 1099 contractor gets paid in full with nothing withheld, then settles up with the IRS directly.

• Withholding: a W-2 has tax taken out automatically; a 1099 means you set money aside yourself.
• Payroll tax: a W-2 employer pays half; a 1099 worker pays the full 15.3% self-employment tax.
• Mileage: a W-2 employee cannot deduct unreimbursed work miles on a federal return; a 1099 driver can.

That last point is the big one. Under the Tax Cuts and Jobs Act - made permanent by the 2025 law - W-2 employees lost the federal deduction for unreimbursed job miles. As a 1099 driver your business miles are still deductible on Schedule C. The full comparison is in 1099 vs W-2 mileage.

You owe the tax even without a form

A 1099 is a paperwork trigger, not the reason you owe tax. If you earned $1,500 driving and never crossed the $2,000 NEC floor, no form gets mailed - but that income is still taxable and you are still required to report it. The form is the IRS's copy, not your permission slip. Keep your own record of every dollar and every mile, because the responsibility is yours whether a 1099 shows up or not.

How mileage shrinks the bill

Self-employment tax is 15.3% - that is 12.4% for Social Security on the first $184,500 of net earnings in 2026, plus 2.9% for Medicare with no cap. It is charged on 92.35% of your net profit and sits on top of regular income tax. The single biggest lever a driver has against it is the standard mileage deduction: 72.5 cents for every business mile in 2026.

Say you earned $38,700 driving and logged 12,000 business miles:

1. Mileage deduction: 12,000 miles x $0.725 = $8,700.
2. Net profit: $38,700 - $8,700 = $30,000.
3. Self-employment tax: 15.3% x (92.35% x $30,000) = about $4,239.

Skip the mileage log and the IRS taxes the full $38,700. The self-employment tax alone would be about $5,468 - roughly $1,229 more, before you even count the extra income tax on the higher profit. Run your own numbers with the mileage deduction calculator.

What to do when a 1099 lands

1. Check the numbers against your own records. Platforms report gross - your take-home is lower after fees.
2. Do not wait for a form to report income. If it never arrives, you still file.
3. Total your business miles for the year and multiply by 72.5 cents.
4. Report income and the mileage deduction on Schedule C, then figure your self-employment tax.

Do I get a 1099 if I made less than $2,000?

Probably not a 1099-NEC - the 2026 reporting floor is more than $2,000. But you still owe tax on what you earned and still have to report it. No form does not mean no tax.

What is the difference between a 1099-NEC and a 1099-K?

A 1099-NEC reports money a company paid you directly for your work. A 1099-K reports money that moved through a payment app or card processor. You could get both in the same year for the same driving - report the income once, and never pay tax on the same dollar twice.

Can I deduct my miles if I get a 1099?

Yes. A 1099 means you are self-employed for that work, so your business miles are deductible at 72.5 cents each for 2026. That is the deduction W-2 employees lost.

Every mile you miss is money left on the table. TruMile tracks your drives automatically, so when your 1099 arrives you already have an IRS-ready mileage log. See how it works for self-employed drivers.

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