# Do I have to file taxes if my side business made less than $400?

Not because of the side business alone. If your net earnings from self-employment are under $400 for the year, you owe no self-employment tax and that income does not by itself require a return. But the IRS says you still have to file if you meet any other filing requirement, and then the business income goes on Schedule C. ProfitDrawer's side hustle income and expense tracker keeps the totals that show your net figure.

The $400 test uses **net earnings from self-employment**, not total sales:

1. Start with sales or fees received.
2. Subtract your business expenses to get your profit.
3. Multiply the profit by 92.35% to get net earnings from self-employment.

So $400 of net earnings is about $433 of profit ($400 / 0.9235).

**Example (example numbers only):** you sold $900 of crafts and spent $560 on supplies and fees. Profit is $340, and net earnings are $340 x 92.35% = $313.99. That is under $400, so no self-employment tax is due.

Those other filing requirements are set out in the Form 1040 instructions. If you file a return for any reason, report all of your self-employment income on it, even small amounts. Payment apps may send a Form 1099-K, and whether or not one arrives, the income still has to be reported when you file. General information, not tax advice.

- Source: [IRS: Self-employed individuals tax center](https://www.irs.gov/businesses/small-businesses-self-employed/self-employed-individuals-tax-center)
- Updated: 2026-10-29
- Published: 2026-10-29
- Category: Small business taxes
- Canonical: https://profitdrawer.com/answers/do-i-have-to-file-taxes-if-my-side-business-made-less-than-400.html
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