WHAT IS THE DEFINITION OF SELF-EMPLOYMENT?
Self-employment can be summed up as an individual who work for themselves. Individuals included can be gig workers, free lancers, business owners (sole proprietor or independent contractor), member of a partnership, etc. things of that nature.
WHAT IS THE SELF-EMPLOYMENT TAX?
The self-employment tax also known as the SECA tax for Self-Employment Contributions Act. The SECA tax is the Social Security and Medicare tax paid by the self-employed.
The current tax rate for self-employment is 15.3% (12.4% social security tax plus 2.9% Medicare tax).
WHAT FORMS ARE USED TO FILE A SELF-EMPLOYMENT TAX RETURN?
IRS Forms 1040, (1040) Schedule C, and 1040-SE.
WHAT CREDITS AND DEDUCTIONS CAN BE CLAIMED ON A SELF-EMPLOYMENT TAX RETURN?
Office expenses, part-time hires, retirement planning, mileage, business trips, and health insurance.
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FREQUENTLY ASKED QUESTIONS
Self-employment taxes can be paid quarterly or annually.
Federal tax, social security tax, and medicare tax. Some states may require a state's income tax.
Yes
To deduct expenses related to the part of your home used for business, you must meet specific requirements. Even then, your deduction may be limited.
A sole proprietor without employees who isn’t required to file any excise tax return and hasn’t established a pension, profit-sharing, or retirement plan doesn't need an EIN (but can get one). In this instance, the sole
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