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Are You Self Employed? Check Out These IRS Tax Tips

April 28, 2015

IRS News

If you are self-employed, there are a few basic things you should know about how your income affects your federal tax return. Here are six important tips about income from self-employment:

  1. Include All Self-Employment Income: Self-employment income can include income you received for part-time work you did in addition to your regular job.
  2. Report Income Using the Correct Form: There are two forms to report self-employment income. Read Part 1 of Schedule C-EZ to find out which form you should use.
  3. Pay Self-Employment Tax: You may have to pay self-employment tax in addition to income tax if you made a profit. Use Schedule SE to figure what you owe. File Schedule SE with your return.
  4. Make Estimated Tax Payments: Use form 1040-ES to estimate how much tax you owe. Then you can make four payments throughout the year online, by phone, or by mail.
  5. Deduct Expenses: You can deduct ordinary expenses (that are common and accepted in your industry) and necessary expenses (that are helpful and proper for your trade or business).
  6. Deduct at the Right Time: In most cases, expenses are deducted in the year you paid them. However, some must be “capitalized,” or deducted over a number of years.

Visit the Small Business and Self-Employed Tax Center on IRS.gov for all your federal tax needs. You can also get IRS tax forms on IRS.gov/forms anytime.