Government knowledge of tax filing from industry as a self-employed individual

Question

Say I am self-employed and work through 'X' platform. The platform claims to only report and/or provide tax documentation if you meet a certain threshold. Given I do not reach this threshold and the company does not report anything, could that technically appear as if I have no earned income from the government's perspective? This is not about skipping taxes but just curiosity.

This is a fine line since this work is provided based on taxpayer identification/verification such as address, SSN, name and etc. This info is presumably for verification as a worker, but given the self-employed nature and the basic tax form filing pre-requisite like a W-8 form (I am not "foreign").

The 1099-K threshold guidelines also may apply here. If I were to make beneath the threshold for the end-platform I work through to consider or require reporting of my income, that would mean the company does not necessarily report my earnings, therefore I may appear as not having earned any money since the company would not notify my earnings exactly due to not reaching a required threshold in order to do so. I am wondering since I am also trying to work/arrange with some government-esque filing that wants to know about income statistics, and I don't know how this all should coincide. If the company I work through (not for) does not report my earnings, should I maybe approach the consideration differently than if the presumed authority already had the option to know? It's kind of unclear on how I should approach this in a non-tax specific obligation way regarding 1099-K and minimums -- and how I should specify given all of the ins and outs of obligation, taxes and end-reporting as a self-employed individual who is responsible for my assessment of taxes to start with.

If the company worked through does not report, should I approach the subject of earned income differently than if they did? I don't want to get stuck in limbo here between their reporting and mine.

Should some things be left unknown -- like they are invisible? Should I come forth with info that's not necessary from a filing perspective, even if that info can technically be incomplete?

I can't afford any lawyers, tax experts, or anything of that nature -- that is why I come here to get a better sense of what to do. Any ideas/tips regarding how I should approach government-associations?

Answer 1

When you are self-employed, you have a business. That business has revenue and expenses, which need to be reported on a tax return. For most people, that is reported on a Schedule C as part of your personal tax return.

You are supposed to report all revenue for your business. That revenue may come from a gig platform, or it may come from individual customers. It may come in the form of cash, check, or direct deposit. It doesn't matter how it comes; it is all supposed to be reported.

The 1099-MISC and 1099-K forms are information forms. They are sent to the IRS (with a copy sent to you) under certain circumstances. The purpose of these is to let the IRS know that you received some revenue. But whether or not you get these forms doesn't really matter to you, as you need to report whatever revenue you actually received, whether or not it appears on a 1099 form.

If you have revenue that was not reported on a 1099 form, the IRS may or may not know about it. They have a few ways of finding things out, and you never know if they are investigating/auditing your customers/gig platform. But even if they don't know about your revenue, there is always a possibility of you getting audited, in which case they will find out about the revenue at that time.

Another thing that some people get confused about: You may find yourself in a situation where you believe that your customer/gig platform is required to file a 1099, but has not. It is not your concern; all you need to do is file your taxes claiming all the revenue that you were actually given. You will not be in trouble for someone else failing to file a 1099. (This is different than a W-2, where you do want to make sure you get an accurate form, because it is your proof of taxes withheld.) However, if someone sends you a 1099 that never gave you money, or someone sends you a 1099 that shows more than you were paid, you probably want to try to get that corrected to avoid red flags at the IRS.

Bottom line: You need to report revenue from your gig platform, even it does not add up to enough for the platform to be required to issue you a 1099.