Yes. Money from selling food from home, such as tamales, cakes or plates, is taxable income, whether customers pay in cash, Zelle or Cash App and whether or not a 1099 arrives. Taxes on selling food from home start with Schedule C, the form for a one-person business, where you subtract what the food cost you to make.

Do I have to report food sales if I never get a 1099?

Yes, because IRS Publication 334 requires you to report all business income, including cash and income no 1099 shows. A 1099-K is the form a payment app or card processor sends to report the payments it handled for you. For 2026, an app files one only when your payments for goods and services exceed $20,000 and 200 transactions, and it may still send one for less, per the IRS 1099-K page. A card processor sends a 1099-K for direct credit, debit or gift card payments no matter the amount.

Zelle never sends one. Zelle's help page says it does not report transactions to the IRS and that reporting taxable payments is your responsibility, the same rule home caterers paid through Zelle follow. A personal Cash App account gets no 1099-K either, and Cash App's own terms limit personal accounts to personal, non-commercial payments. Money from friends and family as a gift or a repayment is not income, so mark those payments non-business in the app when you can.

Keep a short note on each personal deposit as well. When records are thin, an examiner can treat bank deposits as income under the IRS's examiner manual, and app and cash deposits end up in your statements.

"According to Square, I did not qualify to receive tax form 1099K since I processed less than the qualifying amount. So, I am not sure if I should report business income under General Income without tax form1099K."

A mobile caterer paid through a card terminal posted this on the TurboTax Community in 2022, a year with a different 1099-K rule. For 2026 the answer is the same, and the income goes on Schedule C.

Where do my food sales and ingredient costs go on my tax return?

Your sales go on Schedule C, the form for a sole owner's business profit or loss, attached to your Form 1040, and the net profit carries to Schedule 1, the form for additional income that feeds your Form 1040 (Publication 334). Yes, ingredients are deductible as cost of goods sold, meaning what the food you sold cost you to make, on lines 35 through 42 of Schedule C. Containers and packaging that are part of the product, like the foil and tray a plate goes out in, are cost of goods sold. Other packaging is a selling expense, deductible either way.

Other costs follow the ordinary and necessary test of section 162 of the Internal Revenue Code, meaning common and helpful for your kind of business. Supplies, licenses and regulatory fees fit it. When an expense is partly personal, only the business part is deductible. A kitchen that also cooks family meals fails the exclusive-use test, the rule that the space be used only for business, so the kitchen itself is not deductible as a home office (Publication 587).

When do I owe self-employment tax on food sales?

You owe self-employment tax once your 2026 net earnings from the food sales reach $400, and net means after costs. Self-employment tax is Social Security and Medicare tax for people who work for themselves. You figure it on Schedule SE and attach it to Form 1040. For 2026, the rate is 15.3% under section 1401, per the IRS. The tax applies to 92.35% of your net earnings, not all of it. You deduct half of it in figuring adjusted gross income, your income before the standard or itemized deduction, and that deduction reduces income tax only.

As a hypothetical, say your 2026 tamale sales total $12,000, paid in cash, Zelle and Cash App, and your ingredients and packaging cost $4,000. Your Schedule C profit is $8,000. The self-employment tax comes to about $1,130, figured as 15.3% on 92.35% of $8,000, and $565 of it is deducted in figuring adjusted gross income.

For 2026 you generally must pay estimated tax if you expect to owe at least $1,000 after withholding and refundable credits. The last 2026 payment is due January 15, 2027, per Form 1040-ES.

Is selling food from home a business or a hobby?

If you take orders regularly to make money, I treat selling food from home as a business; a one-time batch for a fundraiser is closer to a hobby. An activity counts as a business when your primary purpose is income or profit and you do it with continuity and regularity, per the Schedule C instructions.

The IRS weighs nine factors under Treasury Regulation 1.183-2 (the hobby rules of section 183), and no single factor decides. Four of them are:

• whether you carry on the activity in a businesslike way and keep records
• the time and effort you put into it
• your history of income or losses from it
• elements of personal pleasure or recreation

Hobby income is still reported, on Schedule 1, line 8j of your Form 1040, but hobby costs are not deductible.

If you live in California, what permits and sales tax rules apply?

In California, home cooks sell legally under a cottage food registration or permit or a MEHKO permit, and sales tax depends on whether the food is sold hot. A cottage food operation registers (Class A) or gets a permit (Class B) from the county environmental health department and may prepare only certain foods on the state's approved list. A MEHKO is a small restaurant run from your home kitchen under a local health permit, available only where your city or county has authorized it.

The CDTFA home-based business guide taxes hot prepared food and generally not cold food sold to go.

• A hot tamale or hot plate is taxable.
• Tamales sold cold or frozen to take home are generally not taxable.
• Baked goods sold to go are generally not taxable.
• Sodas are always taxable.

Three or more sales of taxable items in a 12-month period generally requires a seller's permit, California's registration to collect and pay sales tax. The permit itself is free, per CDTFA Publication 73. Every sale is presumed taxable until you show otherwise (Revenue and Taxation Code section 6091), so note hot or cold on each order.

N&T Tax & Advisory Group is based in Santa Clarita and prepares tax returns for food vendors remotely anywhere in the US.