Self-Employed Person

AAA

DEFINITION of 'Self-Employed Person'

An independent contractor or sole proprietor who reports income earned from self-employment. Self-employed persons control who they work for, how the work is done and when it is done.

INVESTOPEDIA EXPLAINS 'Self-Employed Person'

Self-employed persons must pay estimated taxes, usually on a quarterly basis, to cover their FICA and FUTA contributions. They must pay twice as much of the FUTA tax as W-2 employees, who have half of their Social Security and Medicare tax paid by their respective employers.

All self-employed persons report their business income and expenses on Schedule C.

RELATED TERMS
  1. Lipstick Entrepreneurs

    Independent, self-employed businesswomen who sell makeup or other ...
  2. Captive Agent

    An insurance agent who only works for one insurance company. ...
  3. Principal Place Of Business

    The primary location where a taxpayer's business is performed. ...
  4. Tax Schedule

    A rate sheet used by individual taxpayers to determine their ...
  5. Self-Employment Tax

    Money that a small business owner must pay to the federal government ...
  6. 1040 Form

    The standard Internal Revenue Service (IRS) form that individuals ...
Related Articles
  1. Entrepreneurship

    Freelance Careers: Look Before You Leap

    Freelance work is a way to escape the daily grind - but don't ignore the added responsibility that comes with freedom.
  2. Entrepreneurship

    Business Owners: How To Set Up An SEP IRA

    SEP IRAs are simple to set up and run, making them a popular choice for business owners.
  3. Taxes

    How To Qualify For The Home-Office Tax Deduction

    Homebodies can save big on their tax bill. Learn how to get in on the action.
  4. Entrepreneurship

    Should You Incorporate Your Business?

    Find out how becoming a corporation can protect and further your finances.
  5. Taxes

    Small Business Tax Obligations: Payroll Taxes

    Don't leave it up to your accountant - owners are ultimately responsible for fulfilling tax obligations.
  6. Entrepreneurship

    10 Tax Benefits For The Self-Employed

    Running your own business has both personal and financial perks.
  7. Taxes

    3 Common Tax Questions Answered

    We clarify some rules that often puzzle taxpayers.
  8. Options & Futures

    Surviving On An Irregular Income

    Being self-employed provides freedom, but only if you learn to make your money last.
  9. Entrepreneurship

    What are some commonly missed deductions for business owners?

    If you own a business, you are eligible to deduct certain business-related expenses. These include deductions for the following: Home office: If you use a part of your home regularly and ...
  10. Retirement

    How is an SBO-401(k) set up?

    Learn what a Small Business Owner 401(k) plan is and who is eligible to establish one. Find out what the IRS requires of SBO-401(k) participants.

You May Also Like

Hot Definitions
  1. Command Economy

    A system where the government, rather than the free market, determines what goods should be produced, how much should be ...
  2. Prospectus

    A formal legal document, which is required by and filed with the Securities and Exchange Commission, that provides details ...
  3. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest ...
  4. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  5. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  6. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
Trading Center