Alarm
Extension filers: Only left to file your taxes by October 17
Open
Hide Arrow

TurboTax / Tax Calculators & Tips / All Tax Guides / Self-Employment Taxes / Video: Tax Tips for the Self-Employed

Video: Tax Tips for the Self-Employed

Updated for Tax Year 2015


OVERVIEW

The rules for self-employed taxpayers can be complicated. But there's no need to worry as long as you follow some basic rules from the IRS.


This is Victoria from TurboTax. The rules for self-employed taxpayers can be complicated. But there’s no need to worry as long as you follow some basic rules from the IRS.

First, since you are no longer an employee, you’ll need to pay your own income and Social Security taxes. Most taxpayers with self-employment income make quarterly estimated tax payments based on the amount of income the business earns.

Self-employed taxpayers also need to pay self-employment Social Security and Medicare taxes by filing Schedule SE with their tax return.

The rate is 15.3% of your self-employment earnings. But you get to deduct half of those taxes on your 1040 as an adjustment to income.

At tax time, you’ll need to file Schedule C to declare your income from your self-employment wages.

The good news is you can also use Schedule C to list your deductible expenses for things such as advertising, insurance, employee wages and equipment you purchased to do your work.

Most people are cash-basis taxpayers so expenses are deductible in the year you pay them and income counts in the year that you receive it.

If you have a home office that you use exclusively for your business, things like making appointments and billing customers might also be eligible for a home office deduction.

You can also deduct expenses for cars or trucks you use to transport your equipment and to travel from job to job. TurboTax will help you choose between the standard mileage rate or deducting your actual expenses for things such as gas, oil, insurance and repairs.

TurboTax will help you figure out what you owe, what expenses you can deduct and help you file all the right forms.

For more information on the tax rules for being self-employed, visit TurboTax.com.

Self employed man with feet on table

Business and personal taxes in one

Just answer simple questions about your business and life, and TurboTax Home & Business takes care of the rest.

For only $104.99*
Start for Free

Looking for more information?

The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.


Security is built into everything we do
Here's how
* Important Offer Details and Disclosures
  • Filing Deadline: IRS filing deadline for tax year 2015 is April 18, 2016 (except for residents of Massachusetts or Maine, where the IRS filing deadline for tax year 2015 is April 19, 2016).
  • Try for Free/Pay When You File: TurboTax online and mobile pricing is based on your tax situation and varies by product. Free 1040EZ/A + Free State offer only available with TurboTax Federal Free Edition; Offer may change or end at any time without notice. Actual prices are determined at the time of print or e-file and are subject to change without notice. Savings and price comparisons based on anticipated price increase expected 3/18/16. Special discount offers may not be valid for mobile in-app purchases.
  • TurboTax CD/Download products: Price includes tax preparation and printing of federal tax returns and free federal e-file of up to 5 federal tax returns. Additional fees apply for efiling state returns. E-file fees do not apply to New York state returns. Savings and price comparison based on anticipated price increase expected 3/18/16. Prices subject to change without notice.
  • Anytime, anywhere: Internet access required; standard message and data rates apply to download and use mobile app.
  • Fastest refund possible: Fastest tax refund with efile and direct deposit; tax refund timeframes will vary.
  • Pay for TurboTax out of your federal refund: A $X.XX Refund Processing Service fee applies to this payment method. Prices are subject to change without notice. This benefit is available with TurboTax Federal products except the TurboTax Home & Business/QuickBooks Self-Employed bundle offers.
  • About our TurboTax Product Experts: Customer service and product support vary by time of year.
  • About our credentialed tax experts: Live tax advice service is available via phone for your toughest tax questions; fees may apply. Service, experience levels, hours of operation and availability vary, and are subject to restriction and change without notice. Not available for TurboTax Business customers.
  • #1 best-selling tax software: Based on aggregated sales data for all tax year 2014 TurboTax products.
  • Most Popular: TurboTax Deluxe is our most popular product among TurboTax Online users with more complex tax situations.