Filing taxes when the salon gives you a 1099

This guide is for after the classification question is settled. If the salon hands you a 1099 but schedules your hours and assigns your customers, read employee or independent contractor first, because you may be an employee who is being taxed as something else, and that costs you real money.

What follows is for the year you actually have to file as a self-employed person.

Start with the sentence that catches most people out: the money is taxable whether or not a form ever arrives. Nothing was withheld from your pay during the year, so what an employee never sees comes to you as one bill in the spring.

The form may not come this year, and that changes nothing#

For payments made in 2026, a salon only has to issue a Form 1099-NEC once it has paid you $2,000 or more in the year. Before 2026 that threshold was $600. The IRS says the figure is adjusted for inflation after 2026.

So a worker who received a form last year can receive nothing this year, on the same money.

Payment apps are separate. A platform like Venmo, Cash App or PayPal reports on Form 1099-K only when payments for goods and services pass $20,000 and more than 200 transactions. Most nail workers never come near that.

Keep your own record of what you were paid. If a form does come, check it against your record before you file. Forms have errors, and the IRS receives its copy either way.

What you actually file#

Three pieces, all attached to the same return:

1. Schedule C works out the profit. Everything you were paid goes on line 1 as gross receipts. Your business expenses come off below it. What is left is your profit.
2. Schedule SE takes that profit and works out your self-employment tax.
3. Form 1040 is the return itself, where income tax is calculated and both schedules attach.

You file all of it under whichever number you use, an SSN or an ITIN. See applying for an SSN or an ITIN if you do not have one yet.

The tax that surprises people#

Self-employment tax is 15.3% of your net profit. The IRS breaks it into 12.4% for Social Security and 2.9% for Medicare.

That is the same Social Security and Medicare money an employee pays, except an employee only ever sees half of it. Their employer pays the other half and it never appears on the pay stub. As a self-employed person you pay both halves yourself. This is what people mean when they say a 1099 costs you more than a W-2 at the same rate of pay.

Two things soften it:

• The $400 floor. You owe self-employment tax when your net earnings from self-employment were $400 or more. Below that, this particular tax does not apply.
• Half of it comes back as a deduction. The IRS lets you deduct the employer-equivalent portion of your self-employment tax in figuring your adjusted gross income. It does not cut the 15.3%, but it lowers the income the income tax is charged on.

And remember that income tax sits on top of self-employment tax. They are two separate taxes on the same profit.

Expenses are where the bill actually moves#

Self-employment tax is charged on profit, not on what you were paid. Every legitimate business expense you record cuts the profit, so it cuts both taxes at once. This is the part most within your control.

For someone doing nails, the usual ones are:

The rule behind the table is that the expense has to be for the work. The commute from home to the salon you work at is not deductible. Driving from that salon to a second location, or to a supply shop, is.

Mileage in 2026 has two rates#

If you claim the standard mileage rate rather than your actual car costs, 2026 is unusual: the IRS raised the rate part way through the year because of fuel prices.

That means your mileage log has to be split at 30 June, and each half multiplied by its own rate. Anyone who applies one rate to the whole year gets the wrong number.

There is also a further deduction for qualified business income that can reduce the income-tax half for many sole proprietors. The rules are involved, and filing software or a VITA volunteer will work it out from your Schedule C, so it is worth asking about rather than calculating by hand.

Paying through the year, not all at spring#

Because no one withholds for you, the IRS expects you to pay as you earn. You generally have to make estimated tax payments if you expect to owe $1,000 or more when the return is filed.

Estimated payments use Form 1040-ES and fall in four periods:

If a due date lands on a Saturday, Sunday or legal holiday, the payment is on time on the next business day.

You can pay online through your IRS account or IRS Direct Pay, by phone, through the IRS2Go app, or by mail with the 1040-ES voucher.

The way out of the penalty is the safe harbour. You are protected if you owed under $1,000 after withholding and credits, or if you paid at least 90% of this year's tax, or 100% of the tax shown on last year's return, whichever is smaller. That second one is the practical one: once you have a full year behind you, paying last year's total in four parts is a target you can actually hit.

What to keep#

Open a separate bank account for the work if you can. It turns bookkeeping into a bank statement.

Through the year, keep:

• What you were paid, by date, whether cash, app, card or cheque
• Every receipt for supplies, rent to the salon, tools and fees
• The mileage log, split at 30 June for 2026
• Any 1099 forms that arrive, checked against your own record
• Proof of each estimated payment you made

Free help exists, and this trade qualifies#

The IRS funds VITA, which prepares tax returns free of charge. It is aimed at people on lower incomes, people with disabilities and people with limited English, which describes a great many nail workers.

• Phone: 800-906-9887
• Site locator: on the IRS free tax preparation page linked in the sources below

Two things make the visit go better. Bring your records rather than a bag of receipts, sorted into the categories in the table above. And say when you book that you have 1099 income, because some sites limit how complicated a self-employed return they will take on.

Where the state comes in#

Everything above is federal. Most states charge their own income tax on the same profit, with their own forms and their own payment dates, and a few charge none at all.

Your state's revenue or taxation department is the place to ask, and a VITA volunteer preparing your federal return will normally do the state one in the same visit.