Sales commissions, consultant fees, craft sales, any payment to you for a service you performed or a product you made is self-employment income. Most self-employed use a cash basis method. The total that you receive is called gross income. After you subtract expenses you're left with your net income. You pay taxes on net income.
Banks lend or deny loans based upon net income.
Employees receive W-2 forms, which show the year's wages as well as any taxes or employee benefits withheld or paid during the year. IPs do not receive W-2 forms. Every IP must keep a record of his or her own income. Depending upon their business and that of the person for whom they provide a service or sell a product, some freelancers may receive one or more income statements called a Form 1099. One typo can mess up your life.