Independent Contractor (Self -Employed) or Employee

  • Who is Self-Employed?
  • What Are My Self-Employed Tax Obligations?
  • How Do I Make My Quarterly Payments?
  • How Do I File My Annual Return?
  • Who is considered a Employee?

Who is Self-Employed?

Self-Employment is generally someone who has a business or trade as a sole proprietor and/or as an independent contractor. A member of a partnership may be considered as self-employed as well. You are other in business for yourself.

What Are My Self-Employed Tax Obligations?

As a independent contractor or self-employed individual, you are required to file an annual return and pay estimated taxes quarterly. You may be required to pay self-employment taxes as well. See Pub. 334, Tax Guide for Small Business (For Individuals Who Use Schedule C) for more information.

How Do I Make My Quarterly Payments?

Due to Social Security and Medicare, and income taxes are not withheld, independent contractor would use the Estimated Taxes method to pay those taxes due. Form 1040-ES, Estimated Tax for Individuals (PDF), is used to figure these taxes.

How Do I File My Annual Return?

Using a Schedule C, you would report your income or loss from a business you operated or as a sole proprietor. Schedule C Instructions (PDF) may be helpful in filling out this form. In order to report your Social Security and Medicare taxes, you must file Schedule SE (Form 1040 or 1040-SR ), Self-Employment Tax (PDF)

Who is considered a Employee?

An employee is someone who works for a business and the employer is responsible for withholding income taxes and pay Social Security, Medicare taxes and unemployment tax on wages paid to an employee.


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