Lesson Summary

Self-employed individuals are independent contractors, not employees.

• Self-employed individuals control the methods and means of performing services for others.

For a business owned by just one person, self-employment income, expenses, and profit or loss are reported on Schedule C, Profit or Loss From Business.

• Self-employment profit increases the income that is subject to tax.
• Self-employment loss reduces the income that is subject to tax.

Self-employment tax is calculated on Schedule SE, Self-Employment Tax.

• Self-employment tax increases the total tax.
• An adjustment to income of one-half of self-employment tax decreases the income that is subject to income tax.

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"Additional information regarding self- employed taxpayers can be found at the Self - Employed Individuals Tax Center at http://www.irs.gov.

For Small Business Tax Workshops at https://www.irsvideos.gov/SmallBusinessTaxpayer/virtualworkshop "
~ Tina the Tax Tutor