Do I get a 1099?
Yes. If you are a U.S.-based trader and receive $600 or more in payouts during a calendar year, The Prop Pit will issue a 1099-NEC (Non-Employee Compensation) form. This form reports the total amount paid to you and is also filed with the IRS.
When are 1099s sent?
1099-NEC forms are sent by January 31 of the following year, in line with IRS deadlines. For example, payouts earned between January 1 – December 31, 2025 will be reported on a 1099 sent by January 31, 2026.
What about non-U.S. traders?
If you are located outside the United States, The Prop Pit does not issue 1099 forms. However, you are responsible for reporting your trading income according to the tax laws of your country of residence. We recommend consulting a local tax professional.
Is payout income self-employment income?
Payouts from The Prop Pit are generally classified as independent contractor income, not wages. This means:
- No taxes are withheld from your payouts.
- You are responsible for making estimated tax payments if required.
- You may be subject to self-employment tax depending on your filing status.
- You may be able to deduct trading-related business expenses.
The Prop Pit does not provide tax advice. The information above is general guidance only. Consult a qualified tax professional for advice specific to your situation.
What records should I keep?
- All payout confirmations — Download or screenshot each payout receipt from your dashboard.
- Trading logs — Keep records of trades, profit/loss, and account activity.
- Business expenses — Track any costs related to your trading (software, data feeds, education, etc.).