Self-Employed Person

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.

BREAKING DOWN '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.

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RELATED FAQS
  1. Do I still have to pay Social Security tax on my 2015 earnings?

    I retired in 2014. I started my own business in February 2015. I made about $1,500 in revenue in 2015,... Read Answer >>
  2. How will employer taxes affect my profits?

    I plan to employ 2 workers. I understand that I have to match FUTA and SUTA as well as pay unemployment and disability. Will ... Read Answer >>
  3. Do I need to pay self-employment taxes?

    I've always been under the assumption that "legally" my labor is private property. My income is not actually profit, but ... Read Answer >>
  4. How do I determine what to pay in taxes if my employer doesn't withhold payroll taxes?

    If your employer doesn't withhold payroll taxes, you'll need to know these points to know how much to pay in income tax. ... Read Answer >>
  5. What are the Simplified Employee Pension (SEP) IRA contribution limits?

    Discover the 2014 employers' SEP IRA eligible contribution limits for employees and those who are self-employed. These limits ... Read Answer >>
  6. I am retiree, drawing from my 403(b) annuity. I am the sole employee of my own business. ...

    It depends. If your business is unincorporated, and you have net earnings from self-employment, you are eligible to establish ... Read Answer >>
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