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How does one file taxes if they're self-employed?   

#Taxes #Adulting


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Osheen Sharma
@Osheen.Sharma · Posted 18 Sep. 2021

I'm not sure I understand how people do their taxes in general very well. I am even more confused about how people who run businesses or are self-employed do it. Does anyone have any insight into this matter? It is mostly a curiosity question, and I would love to hear from people with first-hand experience.


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Debbie Katz Free Spirit
@debkatz78 · Posted 18 Sep. 2021

With the new IRS rules, it will be made a lot easier. Places like PayPal will be sending out 1099 forms for those who earn money online as freelancers or self-employed individuals. Basically, since you are not being taxed all year with your independent income, you will be expected to pay back what you owe at the end of the tax year. I believe it is 15.3% of your total earnings. This can change depending on whether or not you are married or have dependents (children or caring for an adult). 

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Ryan M
@RyanM · Posted 19 Sep. 2021

You're somewhat correct. PayPal only sends those out if you make over $20,000. They don't send any forms out for anything below that to my knowledge, so if you're self employed, you will have to list this info out yourself when filing. 

Utilize a service like taxact or turbotax to do your taxes, it may cost extra, but it's worth it for those who don't know how to file while being self employed. Especially if you have to pay in on the year. Since you're self employed, you will be taxed more on your earnings. Since you're working for yourself, you'll have general income tax, but will also have self employed tax. If you worked for a business as an employee, you'd only have income tax to pay, but while self employed it's like you're working as a business, so they tax you for that along with income tax. If that makes sense. 

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Osheen Sharma
@Osheen.Sharma · Posted 20 Sep. 2021

Thank you for your response. I didn't know about the Paypal thing.

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Osheen Sharma
@Osheen.Sharma · Posted 20 Sep. 2021

Thank you for the service recommendations, Ryan; and thank you for your response.


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