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Frequently Asked Tax Questions And Answers
Keyword: Self-employment Tax
4.3 Interest/Dividends/Other Types of Income: 1099–MISC, Independent Contractors, and Self-employed
I work as an independent contractor, but I do not own a business
and do not perform services in the name of a business. Can I file my tax return
without filing Schedule C or Schedule SE?
The income you earn as an independent contractor generally will be considered
income from self-employment and you will need to file Form 1040, Schedule C (PDF), Profit or Loss from Business (Sole Proprietorship),
or you may qualify to use Form 1040, Schedule C-EZ (PDF), Net
Profit from Business. You will also need to file Form 1040, Schedule SE (PDF), Self-Employment Tax, if you had net earnings
from self-employment of $400 or more.
References:
I made several thousand dollars moonlighting as an independent contractor.
What taxes do I need to pay?
You are responsible for Federal income tax and self-employment taxes on
your income as an independent contractor. Self-employment taxes are your contributions
to Social Security and Medicare. Your self-employment income and expenses
will be reported on Form 1040, Schedule C (PDF), Profit
or Loss from Business, or you may qualify to use Form 1040, Schedule C-EZ (PDF), Net Profit from Business. You will also
need to use Form 1040, Schedule SE (PDF), Self-Employment
Tax, to compute and report your social security and Medicare tax, if
you had net earnings from self-employment of $400 or more. Since there is
no withholding on your self-employment income, you may need to make quarterly
estimated tax payments. This is done using a Form 1040-ES (PDF), Estimated Tax for Individuals.
References:
- Form 1040, Schedule C (PDF), Profit
or Loss from Business
- Form 1040, Schedule C-EZ (PDF), Net
Profit from Business
-
Instructions for Form 1040, Schedule C
- Publication 334, Tax Guide for Small Business
- Form 1040, Schedule SE (PDF), Self-Employment
Tax
- Form 1040-ES (PDF), Estimated
Tax for Individuals
- Tax Topic 355, Estimated Tax
- Tax Information for
Business
- Publication 505,Tax Withholding and Estimated Tax
9.3 Estimated Tax: Individuals
Do self-employment taxes need to be paid quarterly or yearly?
Self-employment tax is paid by making quarterly estimated tax payments which include
both income tax and social security tax.
References:
12.2 Small Business/Self-Employed/Other Business : Form 1099–MISC & Independent Contractors
What forms and schedules should be used to report income earned as an independent
contractor?
Independent contractor report their income on Form 1040, Schedule C (PDF), Profit or Loss from Business, or they may qualify
to use Form 1040, Schedule C-EZ (PDF), Net Profit
from Business. Independent contractors should also be aware of Form 1040, Schedule SE (PDF), Self-Employment Tax. This form is used to figure
social security and Medicare tax which is based on self-employment income. Also, see Form 1040-ES (PDF) Estimated Tax For Individuals, as you
may need to make quarterly estimated tax payments.
References:
- Form 1040, Schedule C (PDF), Profit
or Loss from Business
- Form 1040, Schedule C-EZ (PDF), Net
Profit from Business
-
Instructions for Form 1040, Schedule C
- Form 1040, Schedule SE (PDF), Self-Employment
Tax
- Form 1040-ES (PDF), Estimated Tax for
Individuals
-
Instructions for Form 1040, Schedule SE
- Publication 533, Self-Employment Tax
- Publication 334, Tax Guide for Small Business
- Tax Topic 554, Self-Employment Tax
- Publication 505, Tax Withholding and Estimated Tax
- Tax information for Business
12.8 Small Business/Self-Employed/Other Business : Schedule C & Schedule SE
I am self-employed. How do I report my income and how do I pay Medicare
and social security taxes?
Your self-employment income is reported on Form 1040, Schedule C (PDF), Profit
or Loss from Business, or on Form 1040, Schedule C-EZ (PDF), Net
Profit from Business.
Your Medicare and social security taxes are reported on Form 1040, Schedule SE (PDF), Self-Employment Tax.
As a self-employed person, you pay your Medicare and social security taxes the
same way you pay your income taxes. If you expect to owe less than $1,000 in total
taxes, you can pay them when you file your income tax return. If you expect to owe
$1,000 or more in total taxes, you will need to make estimated tax payments. These
payments are made quarterly using Form 1040-ES (PDF), Estimated
Tax for Individuals. You will need to figure these taxes at the beginning of
the year. To learn about figuring and making estimated tax payments, please refer
to Publication 505, Tax Withholding and Estimated Tax.
References:
12.9 Small Business/Self-Employed/Other Business : Starting or Ending a Business
If you start your own business and send in your quarterly estimated income
taxes, must you also file a personal income tax return at the end of the year?
If you have $400 or more of net profit from your business, you will have to file
a Form 1040 with a Form 1040, Schedule C (PDF), Profit
and Loss from Business (Sole Proprietorship) or Form 1040, Schedule C-EZ (PDF), Net Profit form Business and Form 1040, Schedule SE (PDF), Self-employment Tax .
References:
I just started a small business and want to know if I have to file my income
taxes quarterly or at the end of the year?
The Federal Income Tax return is filed annually. As a self-employed individual,
if after deducting withholding and credits you expect to owe $1,000.00 at the end
of the year, you should make estimated tax payments on a quarterly basis. Form 1040-ES (PDF) , Estimated Tax for Individuals , will
assist you in determining if estimated tax payment are due and how they are paid.
When you file the income tax return at the end of the year, you include the income
from the business on the return. The forms to be filed are Form 1040 (PDF), U.S. Individual Income Tax Return , Form 1040, Schedule C (PDF), Profit or Loss from Business Form 1040, Schedule SE (PDF), Self-Employment Tax . If estimated tax payments
where made during the year, they will be claimed on the individual income tax return
as payments. See the Form 1040, Line 62.
References:
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